Overview
FAR Subpart 22.16 implements Executive Order 13496, which requires federal contractors and subcontractors to notify their employees of their rights under the National Labor Relations Act (NLRA). The subpart ensures that workers on government contracts are aware of their legal protections regarding collective bargaining, self-organization, and the choice of representatives for employment negotiations.
Key Rules
- Mandatory Notification: Contractors must post a formal notice (provided by the Department of Labor) informing employees of their rights to associate, organize, and bargain collectively under the NLRA.
- Thresholds for Application:
- Prime Contracts: Applies to all contracts exceeding the Simplified Acquisition Threshold (SAT).
- Subcontracts: Applies to all subcontracts exceeding $10,000.
- Geographic Scope: The requirement applies only to work performed within the "United States" (defined as the 50 states, D.C., and various territories including Puerto Rico, Guam, and the U.S. Virgin Islands).
- Commercial Items: The requirement applies to acquisitions for commercial products, commercial services, and Commercially Available Off-the-Shelf (COTS) items, provided they meet the dollar thresholds.
- Indefinite-Quantity Contracts: For these vehicles, the clause is included if the value of orders in any calendar year is expected to exceed the SAT.
Responsibilities
- Contracting Officers (COs): Responsible for inserting FAR clause 52.222-40 into all applicable solicitations and contracts. They also facilitate cooperation between the agency and the Department of Labor during investigations.
- Secretary of Labor: Holds the primary authority to conduct compliance evaluations, investigate employee complaints, and determine if a violation has occurred. The Secretary also has the power to grant specific exemptions based on national interest or economic efficiency.
- Contracting Agencies: Must provide assistance and information to the Department of Labor during enforcement proceedings.
- Agency Heads: Act as a "check" on severe sanctions; they may provide a written objection to the suspension or debarment of a contractor if the contractor’s performance is deemed "essential to the agency’s mission."
- Contractors: Must post the required notices and ensure the "flow-down" of the clause into all qualifying subcontracts exceeding $10,000.
Practical Implications
- Audit Readiness: Contractors must ensure that the Department of Labor (DOL) "Employee Rights Under the National Labor Relations Act" poster is physically displayed in conspicuous places where employees work, or posted electronically if the contractor customarily uses electronic means to communicate with employees.
- Flow-Down Risks: Prime contractors face compliance risks if they fail to flow FAR 52.222-40 down to their subcontractors. A failure at the subcontractor level can trigger a DOL investigation into the prime’s oversight.
- Inter-Agency Conflict: While the DOL handles labor enforcement, the "Mission Essential" provision (FAR 22.1604(d)) creates a unique scenario where a Program Manager or Agency Head can protect a critical contractor from debarment even if labor violations are found, highlighting the tension between labor policy and national security/operational needs.
- Exclusion of Small Purchases: By exempting contracts under the SAT and subcontracts under $10,000, the FAR reduces the administrative burden on very small businesses and micro-purchases.