Companies Have Already Adopted the Best Practices of the Fair Pay and Safe Workplaces Executive Order
This summer, the Obama administration is expected to release final regulations for the Fair Pay and Safe Workplaces Executive Order. The order helps ensure that all federal contractors comply with workplace laws, including health and safety standards, wage laws, and civil rights laws. Once implemented, the order promises to help raise standards for the more than one in five Americans employed by companies that do business with the federal government. It will also ensure that taxpayers receive good value for their investment and will allow law-abiding businesses that respect their workers to compete on an even playing field. While opponents claim the implementation of the order would be overly burdensome, new analysis from the Center for American Progress Action Fund shows that at least 8 of the top-10 U.S. Department of Defense contractors already have experience reviewing their own contractors’ safety records—and some even go further than the order’s safety reporting requirements.
Yet opponents in Congress continue to fight implementation. The Senate is now debating the 2017 National Defense Authorization Act, or NDAA, which includes language that would exempt most Department of Defense contracts from the order’s requirements. This would affect more than 60 percent of all federal contracts. The House has already passed a version of the NDAA that contains similar language. President Obama has issued veto threats on the Senate and House versions of the bill, arguing that limiting the applicability of the order “would undermine broader safeguards established by the President.”
Opponents are arguing that the order’s legal reporting requirements will create an undue burden on private companies. Yet, the order will require law-abiding companies to simply check a box to certify legal compliance; government contractors are familiar with this process, and regularly use the check-the-box method to report on a number of other compliance issues. Moreover, requiring contractors with legal violations to disclose their workplace records before they are able to receive a contract is increasingly common in the private sector as companies find that it is a cost effective way to ensure future compliance.
A number of industry associations—including the Construction Users Roundtable, the American National Standards Institute, and FM Global—recommend evaluating the safety record of companies bidding for contracts. And there are even private-sector companies that manage the contractor vetting processes—including safety reviews—for other companies.
Many of the defense contractors’ methods look quite similar to the safety record reporting requirements contained in the Fair Pay and Safe Workplaces Executive Order. A number of companies require reporting of Occupational Safety and Health Administration, or OSHA, citations on questionnaires prior to awarding a contract, and one company reports that if it identifies problems with a supplier during the review process, it will try to work with the supplier to improve its standards.
Some companies even go further. For example, while the executive order would require the reporting on workplace safety citations that occurred over the past three years, Raytheon requires contractors to report on any safety citations for the past 10 years. And some companies require reporting of injury and workers compensation data along with a bidder’s violation history.
The list below documents how and when safety review occurs at the top-10 recipients of Department of Defense prime contracts by dollar value in Fiscal Year 2015. Information on contractor safety review comes from company websites and forms that are freely available online. While the available evidence of this sort of safety review was often confined to a particular company division or type of supplier, it may be that this type of review happens more widely, but is not posted on publicly available websites.
8 of the top-10 defense contractors have reviewed their contractors’ safety records
1. Lockheed Martin
Defense contracts in Fiscal Year 2015: $29.4 Billion
Review of safety records: In order to perform services for Lockheed Martin’s Engineering, Procurement & Construction Group, companies must complete a prequalification form that asks about their safety record in terms of work days lost to accidents, number of medical treatments, and fatalities. Companies are also required to report on their involvement in litigation, and if so, information on the type of litigation.
2. The Boeing Company
Defense contracts in Fiscal Year 2015: $13.2 billion
Review of safety records: The Boeing Company’s Integrated Defense System’s has required companies doing work on property that Boeing owns, operates, or controls to report on whether they were cited in the past five years by OSHA or an environmental regulatory agency as well as reporting on injury, fatality, and workers’ compensation data.
3. Raytheon Company
Defense contracts in Fiscal Year 2015: $12.3 billion
Review of safety records: Raytheon Company requires contractors performing work on its premises to adhere to safety requirements and report on any safety citations “from any U.S. Government, city, or local entity for the past ten years,” and to provide injury and workers’ compensation data for the past three years.
4. General Dynamics Corporation
Defense contracts in Fiscal Year 2015: $11.5 billion
Review of safety records: General Dynamics NASSCO, part of the Marine Systems group of General Dynamics Corporation, requires suppliers and subcontractors who work within the production areas of its facilities, to submit a detailed survey of safety and health management practices and past performance, which includes injury and fatality data as well as a list of OSHA citations issued over the past three years.
5. Northrop Grumman Corporation
Defense contracts in Fiscal Year 2015: $7.3 billion
Review of safety records: Northrop Grumman has required bidders for construction, maintenance, and repair contracts to report on whether the company has received any OSHA citations for the past three years, along with fire and air quality citations as part of an environmental safety qualification questionnaire. The questionnaire also requires companies to submit data on their fatality, injury, and workers’ compensation records.
6. United Technologies Corporation
Defense contracts in Fiscal Year 2015: $6.7 billion
Review of safety records: Pratt & Whitney, a subsidiary of United Technologies, requires bidders to provide detailed safety information for any contracts for work beyond administrative functions in office work areas. Bidders must report if the company received “any government/regulatory agency citations in the past twelve months,” as well as the total number of reportable injuries the past three years and how many work-related incidents resulted in employees missing a day of work.
7. L-3 Communications Holdings, Inc.
Defense contracts in Fiscal Year 2015: $5 billion
Review of safety records: No reporting requirements found.
8. BAE Systems PLC
Defense contracts in Fiscal Year 2015: $4.4 billion
Review of safety records: On the company’s website, BAE Systems states that the company expects its suppliers “to comply with local legislation and to meet the same or equivalent standards as BAE Systems on issues ranging from ethical conduct to health and safety.” The company reports that it assesses compliance during the supplier selection process, using “desktop research, supplier questionnaires, [and], in some cases, site visits.” If the company identifies problems during this process, they “try to work with [their] suppliers to improve their standards.”
9. Humana Inc.
Defense contracts in Fiscal Year 2015: $3.6 billion
Review of safety records: No reporting requirements found.
10. Huntington Ingalls Industries Inc.
Defense contracts in Fiscal Year 2015: $3.1 billion
Review of safety records: Ingalls Shipbuilding requires its bidders for production work contracts and any potential subcontractors to report on injury statistics and worker’s compensation data on an Environmental, Health and Safety Form. The company also reports that it requires contractors to report on their citation history.
The Fair Pay and Safe Workplace Executive Order promises to raise standards for workers, taxpayers, and the vast majority of companies that respect their workers and comply with the law. While opponents are fighting final implementation of the order by claiming that the burden of implementation would be excessive for business, the order’s reporting requirements are already best practices used throughout the private sector.
Karla Walter is Director of the American Worker Project at the Center for American Progress Action Fund.
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Senior Director, American Worker Project