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USA Federal Legislation Simplified

Economy in Government Contracting

E.O. 13494
Feb 4, 2009
E.O. 13494
Feb 4, 2009

Summary

Stops the government from paying contractors for money they spend trying to convince workers whether or not to join a union.

What problem does this solve?

The government was paying contractors for costs unrelated to their work, such as influencing employees about unions. This order stops these payments to save taxpayer money and keep the government neutral in labor issues.

What does this order do?

Prohibits reimbursement for anti-union activities
Makes it illegal for government contractors to be paid back for money spent to persuade employees about whether or not to join a union or how to bargain.
Defines unallowable costs
Lists examples of unallowable costs, including preparing anti-union materials, hiring consultants, and holding meetings to persuade employees.
Clarifies allowable costs
Allows contractors to be paid for costs related to maintaining good employee relations, such as labor-management committees and certain employee publications.
Requires new regulations
Orders the Federal Acquisition Regulatory (FAR) Council to create new rules within 150 days to put this order into practice.

Who does this affect?

  • Federal government contractors
  • Employees of federal contractors
  • Labor unions

What is the real world impact?

•
Supports employee rights to organize
Removes a financial advantage for contractors who use federal money to persuade employees against unionizing. This creates a more neutral environment for employees to decide on union representation.
•
Saves taxpayer money
Prevents federal funds from being used for costs that are not directly related to the goods and services the government buys. This directly reduces government spending.

When does this start?

This order is effective immediately, but its rules apply to new contracts only after the Federal Acquisition Regulatory Council creates new regulations within 150 days.
FAR Council Rulemaking Deadline
The Federal Acquisition Regulatory Council must create new rules to implement this order within 150 days of January 30, 2009.
Application to New Contracts
The new rules will apply to government contracts that come from requests made after the FAR Council's new rules are effective.