EO (Executive Order)

What is EO (Executive Order)?

In the context of government contracting, Executive Orders (EOs) are presidential directives that often influence procurement policies and practices. These orders can create new requirements for contractors, modify existing regulations, and establish preferences for certain types of businesses or products. Understanding EOs is crucial for government contractors to ensure compliance and identify potential opportunities.

Definition

An Executive Order is a legally binding mandate issued by the President of the United States to manage operations of the Federal Government. These orders direct federal agencies to take specific actions or implement particular policies. EOs derive their authority from either the Constitution or acts of Congress. They are numbered sequentially and published in the Federal Register, eventually codified in Title 3 of the Code of Federal Regulations (CFR). For government contractors, compliance with applicable EOs is often a condition of receiving and maintaining contracts. Failure to comply can result in penalties, including contract termination.

EOs can significantly impact various aspects of government contracting, including affirmative action, labor standards, environmental protection, cybersecurity, and supply chain security. For example, an EO may require contractors to implement certain cybersecurity measures or prioritize the use of American-made goods. Understanding the specific requirements of relevant EOs and incorporating them into business practices is essential for success in the government contracting market.

Key Points

• Impact on Procurement: EOs frequently direct changes to federal procurement policies and practices, affecting what, how, and from whom the government buys goods and services.
• Compliance is Mandatory: Adherence to applicable EOs is a mandatory condition for doing business with the federal government. Non-compliance can lead to contract termination or other penalties.
• Wide Range of Subjects: EOs can cover a broad spectrum of topics, from labor standards and environmental protection to cybersecurity and supply chain security.
• Monitoring is Essential: Contractors must continuously monitor for new EOs and updates to existing ones to ensure ongoing compliance.

Practical Examples

1. Affirmative Action Requirements: Executive Order 11246, for example, requires federal contractors to take affirmative action to ensure equal employment opportunities. Contractors must implement specific plans and programs to promote diversity and inclusion in their workforce.
2. Minimum Wage for Contractors: Executive Order 14026 increased the minimum wage for federal contractors. This means contractors must pay their employees at least the mandated minimum wage for work performed on covered federal contracts.
3. Cybersecurity Requirements: Executive Orders related to cybersecurity often mandate specific security protocols and standards that contractors must adhere to when handling government data. This might include implementing NIST standards or complying with specific data breach notification requirements.