A slew of regulations for federal contractors issued during the Biden administration just got buried under the heavy, black Trump signature. From pay equity to artificial intelligence, lots has changed. The Federal Drive with Tom Temin get highlights now from Washington procurement attorney Eric Crusius.
Interview transcript:
Tom Temin The recession and pullback of DEI, diversity, equity, inclusion and the added accessibility from the federal bureaucracy is also having an effect on the contractor side, too. Correct?
Eric Crusius Right. One of the places where you could make immediate action and where the President has the most control, of course, is the federal contractor. And that’s why I’m always fairly busy in the first month of the new administration, because the new president wants to put his or her stamp on the federal bureaucracy. And these executive orders are a way to do it, and contractors are a way to do it. And there have been some certainly dramatic changes in that in the DEI space just in the last week or so.
Tom Temin So how will the pushing out of DEI? We know how it’s affecting the government. But there were DEI related types of strictures on contractors that the Biden administration had imposed.
Eric Crusius Right. So it’s kind of a laundry list of different things. And it’s not surprising, based on President Trump’s campaign, that these are the things that he’s targeting. You could go back all the way to the Lyndon Johnson administration and maybe even further back to to see things that we haven’t seen in that length of time. One of the executive orders has been rescinded is Lyndon Johnson executive order 11246, which is from 50. My math isn’t great, 50-60 years ago that required contractors to have affirmative action programs, and that’s now been rescinded. There’s a whole office dedicated to that into looking at contractors programs to make sure they were compliant with the rule.
Tom Temin Wow. So they really went back far?
Eric Crusius Yes, They’ve really opened the history books. And then there’s another kind of DEI related executive order. In the waning days of the last Trump administration, he issued an executive order to require certain kinds of training or any kind of affirmative action DEI training for contractors not to kind of target groups. There was this specific language in the executive order, but that’s how they kind of termed it. And Biden, on day one or day two, rescinded that executive order. The interesting thing about that executive order is that it went into effect 60 days and there was a requirement on contractors in new contracts 60 days after the executive order was issued, which was that 60 day mark was December 2020. Now, Biden rescinded that executive order. Trump rescinded the rescission of the executive order. So now the executive order presumably is back and should be in new contracts moving forward, just based off the language of the executive order because the unrescinded executive order is now live again.
Tom Temin Right. And would it have required of contractors that it no longer does?
Eric Crusius Yes. So what the original executive order did is it said, you can maybe have some affirmative action training programs, but they can’t be done in a manner. And this is from the executive order, not my personal opinion, but it can be done in a manner to make certain groups feel bad about their past and their history. So that was fairly interesting, executive order. A lot of contractors had to change their programs and to ensure that they were complying with that executive order that some, I would say, probably didn’t do much because they knew the Trump administration was ending a month later. But now it’s back and those contractors will have to be compliant without those requirements.
Tom Temin All right. Well, let’s move on from the DEI question. One of the things that you have pointed out in a posting that the Holland Knight Firm has put out non displacement of qualified workers under service contracts, that’s a huge issue.
Eric Crusius That’s right. And this thing has been going back since the first Bush administration, really the Clinton administration, where they had a non displacement rule which required contractors to give offers of first refusal to the incumbent service contract workforce. The Clinton one was a little bit more limited than we had George W. Bush rescinding that. And then we had the Obama administration putting it back, and we had the first Trump administration taking it away, get the idea. And the Biden administration was a little bit slow with putting this into place. The executive order was issued, I think, a few months into the Biden administration. The DOL rule came out a while back, but the FAR rule never happened. There was not even any evidence that they were working on it, but I’m sure they were. And on day one, rescinded again. So here we go. It’ll take another Democratic administration to have that come back.
Tom Temin Right. So in other words, now if a service contractor displaces another one, it can use its own people.
Eric Crusius Exactly.
Tom Temin To the discretion that it wants.
Eric Crusius Exactly. It has a lot of extra discretion, which the incoming contractor will find helpful.
Tom Temin We’re speaking with Eric Crusius. He’s a procurement attorney and partner at Holland and Knight. And let’s talk about the executive orders on regulation itself. And that would be number 13992 from 2021 fairly early. I think that was the first day Biden administration thing on revocation of certain executive orders concerning federal regulation, What’s going on there?
Eric Crusius Right. So this is something we see kind of the back and forth with each administration. So it’s not entirely surprising, but that doesn’t make it interesting or impactful. So what this did is it revived certain Biden rescinded some executive orders. This new Trump administration executive order will revive some executive orders they had. The first is requiring two regulations to go away for every one new regulation to kind of lessen the regulatory burden. Also, there was a regulatory reform task force for each agency that was established. The interesting thing is a lot of agencies will use guidance documents, and sometimes contractors are unaware that the guidance exist or that they’ll be held accountable.
Tom Temin Yes, that was an issue that the guidance documentation didn’t appear on Biden administration website.
Eric Crusius Right. And that was a criticism going back for many years where, and I’ve dealt with that with clients where they’re being held to a standard that they don’t quite understand why. And for most clients who come to me and other government procurement lawyers, it’s more an area self-selecting group because they’re trying to get help, but it’s more just tell us what to do and we’ll do it. But we have to know kind of what to do. So these executive orders collectively require these guidance documents to be published. They require them to be easily accessible. They require certain guidance documents to go through a regulatory review process so that the public can comment on them, things like that. So it’s a more kind of open process where the guidance is out there and contractors understand they have to be held accountable for it.
Tom Temin And from the early signals, and it is early, you’ve got the Office of Information and Regulatory Affairs that deals with regulation, but then you’ve got the Office of Federal Procurement Policy. And then over at Labor, you’ve got the Office of Federal Contract Compliance Programs. Where do you think the energy is going to be coming here for what contractors have to deal with? Or will all three be activated on that front?
Eric Crusius I really think all three will be activated. I think we’re just going to see fairly significant changes in each one of them. I think the Office of Information Regulatory Affairs there is on the Republican side of the aisle, there is actually argument for more funding for that to kind of take a closer examination at the regulations that are going through that office. Sometimes regulations actually take a long time to get through that office, and it’s because they have a lot of work to do. It’s not because people are just hanging out. I think more funding for that office would be helpful. So there’s a swifter process, but maybe a more in-depth process.
Tom Temin Yeah, I’ve understood that Leslie Fields has a very flexible neck from working for so many years, for so many different administrations. Looking this way, looking that way. You never know which way the flame is going to blow. And what about America First, they can rhetorically keep doubling down on that, as the Biden administration did. And we know the Trump administration will. But at some point, you can’t buy stuff made in America because it doesn’t exist.
Eric Crusius Right. A lot of these made America policies do have some kind of lead time because there needs to be time to set up a manufacturing process in the United States. If the government is going to require things to be made in the U.S., there will be a market for manufacturing facilities in the U.S. and people will invest money to do that. But there has to be time to do that. There has been significant change during the first Trump and during the Biden administration towards making things in America. In fact, in the waning days of the Biden administration, they revoked a waiver for manufacture products and in construction projects that had been around since the early 1980s for Made in America. So now those products, starting in two and three years, will have to be made in the United States.
Tom Temin Wow. So when they build a new stadium in DC, if there’s any federal involvement at all and who knows? Then you got to find girders made here and not in Korea.
Eric Crusius Very possibly. Yeah.
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