Since the 1960’s the federal government’s procurement regulations have been used for the administration’s social policy implementation.  For example, the procurement regulations were used to promote, affirmative action, good compliance actors, anti-human trafficking, and health and safety concerns. 

So, the question becomes, when is the president's authority under the Federal Property and Administrative Services Act, sometimes referred to as the Procurement Act, to carry out procurement policies and directives that are economical and efficiency, an overreach and violative of other laws?

For example, President Biden issued a vaccine mandate which required federal contractors to ensure that their employees were either fully vaccinated or getting tested for COVID-19 on a weekly basis citing the procurement regulations as its basis. This mandate also required federal employees to be vaccinated or lose their jobs and contractors’ employees who would go on federal property to be vaccinated.  However, a number of courts blocked the mandate for federal contractors as well as the requirement that federal employees be vaccinated essentially stating that the requirements overstepped the authority given to the President under the procurement regulations.

A more interesting development is the attack on President Biden’s executive order raising the minimum wage to $15 an hour for a subset of federal contractors.  President Obama had previously issued an executive order increasing the minimum wage for federal contractors, and it was shrugged off.  However, this time around there are a number of lawsuits against the minimum wage increase.

Caleb Kruckenberg of the Pacific Legal Foundation, who represents the plaintiffs in the 10th Circuit Court of Appeals minimum wage case, states: "It didn't put any meaningful limit on what the president can do. If that's the rule going forward, then there's essentially nothing the president can't do to an entity that has some sort of economic relationship to federal property. It's a minimum wage here, it's something else in the future."

Progressives, such as Anastasia Christman, a senior policy analyst at the National Employment Law Project, argue that "[t]he Procurement Act is pretty clear and presidents have been using it for generations.  It says that as the executive, he is within his ability to make changes that improve the economy and efficiency of the government operations."

With the courts bearing down on the actual limitations on presidential power concerning the procurement act, Jackson Lewis' Laura Mitchell said the Procurement Act argument is a common one for challenging federal contract requirements.  "That's an argument we are seeing a lot now. They're typically part of the basis of those challenges, to say, 'You overstepped your authority,'" she said. 

And this leads to the affirmative action requirements under Executive Order 11246.  The executive order was implemented in the 1960s during the height of the civil rights movement.  The question becomes whether President Johnson actually had the authority to dictate internal federal contractor processes when it comes to procurement and whether these requirements should be a part of the framework for determining who can and who cannot be a federal contractor.  The costs imposed on federal contractors over time has increased greatly and thus increasing the cost of business to government contracts.  Very few bad actors had been debarred.

If the courts strike down the federal contractor’s minimum wage executive order, it could put the crosshairs on Executive Order 11246.  To understand the politics at play, the Harvard case before the U.S. Supreme Court is considering the impact on affirmative action in the university selection processes.  If, as expected, the court rules against Harvard, an enterprising federal contractor could sue over the requirements of Executive Order 11246 and given the make-up of this supreme court, it would likely rule that the President cannot require affirmative action through the procurement process but that it must be by legislative requirements, which, in this environment, would not likely happen.

Source:  The Observer 2/17/22, Law360 2/14/22, Bloomberg Law 1/14/22, CNET 1/13/22