Government Contracts E.O. Targets Contractor Use of Foreign Labor, Offshoring
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Monday, August 31, 2020

E.O. Targets Contractor Use of Foreign Labor, Offshoring

By Government Contracts Editorial Staff

Executive Order 13940, Aligning Federal Contracting and Hiring Practices With the Interests of American Workers, promotes a government policy to create opportunities for U.S. workers to compete for jobs, including jobs created through federal contracts. These opportunities, particularly in regions where the federal government remains the largest employer, are especially critical during the economic dislocation caused by the COVID-19 pandemic. According to the order, “[w]hen employers trade American jobs for temporary foreign labor, for example, it reduces opportunities for [U.S.] workers in a manner inconsistent with the role guest-worker programs are meant to play” in the nation’s economy.

Agency Contract Review. The order directs executive department and agency heads to review contracts awarded in fiscal years 2018 and 2019 to assess whether contractors used temporary foreign labor for contracts performed in the U.S. and, if so, the nature of the work performed. This assessment must also determine whether these practices impact opportunities for U.S. workers and any potential effects on national security. Agencies must further assess whether contractors and subcontractors performed services in foreign countries that were previously performed in the U.S., and, if so, whether opportunities for U.S. workers were affected by offshoring. This part of the assessment must also determine whether affected U.S. workers were eligible for assistance under the Trade Adjustment Assistance program authorized by the Trade Act of 1974 and any potential effects on national security. In addition, agency heads must assess any negative impact of temporary foreign labor hiring or offshoring practices on the economy and efficiency of federal procurement and on national security, and propose action, if necessary, to improve the economy and efficiency of federal procurement and protect the national security. Finally, the order instructs agency heads to review agency employment policies and assess agency compliance with E.O. 11935, Citizenship Requirements for Federal Employment, and section 704 of the Consolidated Appropriations Act, 2020 (PL 116-93).

Additional Reports. Within 120 days from the date of the order, each agency head must submit a report to the Director of the Office of Management and Budget summarizing the results of reviews, recommending necessary corrective actions, and proposing any presidential actions that may be appropriate. Finally, within 45 days, the Secretaries of Labor and Homeland Security must take action to protect U.S. workers from any adverse effects on wages and working conditions caused by the employment of H-1B visa holders at job sites, including measures to ensure that all employers of H-1B visa holders, including secondary employers, adhere the requirements of section 212(n)(1) of the Immigration and Nationality Act (8 USC 1182(n)(1)).

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