§22.2004-3 Postaward assessment of a prime contractor's labor law violations.

(a) Contractor duty to update. (1) If there are new labor law decisions or updates to previously disclosed labor law decisions, the contractor is required to disclose this information in SAM at www.sam.gov, semiannually, pursuant to the clause at 52.222-59, Compliance with Labor Laws (Executive Order 13673).

(2) The contractor has flexibility in establishing the date for the semiannual update. The contractor may use the six-month anniversary date of contract award, or may choose a different date before that six-month anniversary date. In either case, the contractor must continue to update its disclosures semiannually.

(3) Registrations in SAM are required to be maintained current, accurate, and complete (see 52.204-13, System for Award Management Maintenance). If the SAM registration date is less than six months old, this will be evidence that the required representation and disclosure information is updated and the requirement is met.

(b) Assessment of labor law violation information during contract performance. (1) The ALCA monitors SAM and FAPIIS for new and updated labor law decision information pursuant to paragraph (a) of this section. If the ALCA is unable to obtain any needed relevant documents, the ALCA may request that the contracting officer obtain the documents from the contractor and provide them to the ALCA. If the contractor had previously agreed to enter into a labor compliance agreement, the ALCA verifies, consulting with DOL as needed, whether the contractor is making progress toward, or has entered into and is complying with a labor compliance agreement. The ALCA also considers labor law decision information received from sources other than SAM and FAPIIS. If this information indicates that further consideration or action may be warranted, the ALCA notifies the contracting officer in accordance with agency procedures.

(2) If the contracting officer was notified pursuant to paragraph (b)(1) of this section, the contracting officer shall request the contractor submit in SAM any additional information the contractor may wish to provide for the contracting officer's consideration, e.g., remedial measures and mitigating factors or explanations for delays in entering into or for not complying with a labor compliance agreement. Contractors may provide explanatory text and upload documents in SAM. This information will not be made public unless the contractor determines that it wants the information to be made public.

(3) The ALCA will provide written analysis and advice, using the DOL Guidance, for the contracting officer to consider in determining whether a contract remedy is warranted. The analysis and advice shall include the following information:

(i) Whether any labor law violations should be considered serious, repeated, willful, and/or pervasive.

(ii) The number and nature of labor law violations (depending on the nature of the labor law violation, in most cases, a single labor law violation may not necessarily warrant action).

(iii) Whether there are any mitigating factors.

(iv) Whether the contractor has initiated and implemented, in a timely manner—

(A) Its own remedial measures; and/or

(B) Other remedial measures entered into through agreement with, or as a result of, the actions or orders of an enforcement agency, court, or arbitrator.

(v) Whether a labor compliance agreement or other remedial measure is—

(A) Warranted and the enforcement agency or agencies that would execute such agreement with the contractor;

(B) Under negotiation between the contractor and the enforcement agency;

(C) Established, and whether it is being adhered to; or

(D) Not being negotiated or has not been established, even though the contractor was notified that one had been recommended, and the contractor's rationale for not doing so.

(vi) Whether the absence of a labor compliance agreement or other remedial measure, or noncompliance with a labor compliance agreement, demonstrates a pattern of conduct or practice that reflects disregard for the recommendation of an enforcement agency.

(vii) Whether the labor law violation(s) merit consideration by the agency suspending and debarring official and whether the ALCA will make such a referral.

(viii) Any such additional information that the ALCA finds to be relevant.

(4) The contracting officer shall—

(i) Determine appropriate action, using the analysis and advice from the ALCA. Appropriate action may include—

(A) Continue the contract and take no remedial action; or

(B) Exercise a contract remedy, which may include one or more of the following:

(1)(i) Provide written notification to the contractor that a labor compliance agreement is warranted, using the procedures in 22.2004-2(b)(7) introductory paragraph and (b)(7)(i), appropriately modifying the content of the notification to the particular postaward circumstances (e.g., change the time in paragraph 2004-2(b)(7)(i)(D) to “within six months of the notice”); and

(ii) Notify the ALCA of the date the notice was provided to the contractor; and notify the ALCA if the contractor fails to respond by the stated deadline or indicates that it does not intend to negotiate a labor compliance agreement.

(2) Elect not to exercise an option (see 17.207(c)(8)).

(3) Terminate the contract in accordance with the procedures set forth in part 49 or 12.403.

(4) In accordance with agency procedures (see 9.406-3(a) and 9.407-3(a)), notify the agency suspending and debarring official if the labor law violation(s) merit consideration; and

(ii) Place any ALCA written analysis in the contract file with an explanation of how it was considered.

(5) If the contractor enters into a labor compliance agreement, the entry shall be noted in FAPIIS by the ALCA.

Note to section 22.2004-3: By a court order issued on October 24, 2016, this section is enjoined indefinitely as of the date of the order. The enjoined section will become effective immediately if the court terminates the injunction. At that time, DoD, GSA, and NASA will publish a document in the Federal Register advising the public of the termination of the injunction.

[81 FR 58642, Aug. 25, 2016; 81 FR 91639, Dec. 16, 2016]