November 9, 2020

What Should Contractors Expect in a Biden Administration?

Holland & Knight Alert
Eric S. Crusius | Mary Beth Bosco

Highlights

  • Presidents often have a profound impact on rules impacting government contractors because many such requirements can be done through executive orders or regulatory actions without the need for Congress to step in.
  • Because of that, it may be helpful to take a preliminary look at how a Joe Biden/Kamala Harris Administration would impact the government contracting marketplace.

As of Nov. 9, 2020, most major media outlets have called the presidential race in favor of Joe Biden and Kamala Harris. Because of that, it may be helpful to take a preliminary look at how a Biden/Harris Administration could impact the government contracting marketplace.

Presidents often have a profound impact on rules impacting government contractors because many such requirements can be done through executive orders or regulatory actions without the need for Congress to step in.

Labor and Employment

Although the Trump Administration has continued to enforce the Service Contract Labor Standards (SCLS) and the Davis-Bacon Act, there are differences in how the new administration would utilize existing and recently repealed regulations.

  • Nondisplacement of Qualified Workers: The Trump Administration rescinded this regulation, enacted during the Obama Administration, which had required incoming contractors to make offers of employment to the incumbent SCLS-covered work force. Expect the Biden Administration to issue new regulations similar to the Obama-era one.
  • Prohibition on Stereotyping and Scapegoating Diversity Training: President Donald Trump recently issued an executive order regulating the content and the use of certain types of diversity training. Expect a Biden Administration to rescind that order shortly after taking office. In the meantime, the Trump Administration can enforce it until it is out of office.
  • Fair Pay and Safe Workplaces: This regulation, which had required contractors to disclose previous labor violations when submitting proposals, was stayed by a federal court in October 2016 and rescinded under the Congressional Review Act (CRA) soon after President Trump took office in 2017. Any new regulations governing the disclosure of contractor labor violations would need to address the issues raised by the court and be dissimilar enough from the previous regulation to not be prohibited by the CRA.

Although labor enforcement has been relatively active during the Trump Administration, expect that under Biden, the U.S. Department of Labor (DOL) would become more active once his appointees take their positions.

Cybersecurity

Those close to Biden expect he would take up the recommendation in the Cyberspace Solarium Commission's Report to establish a National Cyber Director to help coordinate the country's cybersecurity response. On the regulatory side, there is no indication that a change in administration would cause drastic alterations to the Cybersecurity Maturity Model Certification requirements. That could change depending on which officials (if any) replace the current team pushing this initiative through. For instance, former Obama Administration official Frank Kendall wrote a highly critical op-ed about the program.

Domestic Preferences

Much like the Trump Administration, contractors should expect that a Biden Administration would continue to emphasize programs that give preference to U.S.-manufactured products. In fact, during a recent speech, President-Elect Biden stated that he wanted the government to purchase American-made goods from contractors. The difference between the two administrations may be whether the Biden Administration will engage with multinational organizations, such as the World Trade Organization.

Government Ethics

President-Elect Biden proposes consolidating all government ethics obligations into one agency instead of having them dispersed across multiple agencies and creating a Commission on Federal Ethics. Further, Biden proposes giving Inspectors General full subpoena power. The incoming administration is also considering prohibiting officers and directors of federal contractors from contributing to federal candidates.

Enforcement

As has been the case with other Democratic administrations, contractors should expect to see increased enforcement and white collar prosecutions, including under the False Claims Act and the Foreign Corrupt Practices Act. Further, forgiven loans under the Paycheck Protection Program will most likely receive additional scrutiny.

Chinese Technology

The Trump Administration took aggressive action against technology companies tied to the Chinese communist party with the regulations implementing Section 889 of the National Defense Authorization Act. The regulations contemplated the potential for a more expansive ban on the use of such technology despite pushback from contractors concerned about the impact on vital supply chains. A Biden Administration may be more open to waivers under the regulation or step back from expanding the ban.

In the coming days and weeks, the Biden-Harris transition is expected to gather further steam and provide additional information regarding the new administration's priorities. Holland & Knight's Government Contracts Group will continue to monitor the transition and provide additional information along the way.


Information contained in this alert is for the general education and knowledge of our readers. It is not designed to be, and should not be used as, the sole source of information when analyzing and resolving a legal problem, and it should not be substituted for legal advice, which relies on a specific factual analysis. Moreover, the laws of each jurisdiction are different and are constantly changing. This information is not intended to create, and receipt of it does not constitute, an attorney-client relationship. If you have specific questions regarding a particular fact situation, we urge you to consult the authors of this publication, your Holland & Knight representative or other competent legal counsel.


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