The Government Accountability Office recently considered whether a offeror’s affiliate companies should be considered by the government in evaluating the offeror’s experience in Iyabak Constr. LLC, GAO, B-409196, 2/6/14, decision released 2/11/14. The solicitation should past performance experience for similar projects within the last five years, but experience examples were limited to projects performed by the firms submitting the offers and the government did not consider Iyabak’s affiliates experiences.

Iyabak protested and the GAO decided that the restrictions imposed were unnecessary, recommending the government’s modification of the RFP to consider the experience and past performance of offerors’ affiliates showing a firm commitment to be meaningfully involved in contract performance (but noting it would be improper to consider affiliates that were not going to be meaningfully involved).

On February 12, 2014, President Obama signed his promised Executive Order increasing the minimum wage to $10.10 per hour for workers under new and renegotiated federal contracts. The Executive Order also increases the minimum wage for tipped workers starting January 1, 2015. The new wage rates will raise with inflation each year. Covered workers include those in the construction and service industries.

The related issues are many; but two immediate concerns for employers are: 1) the likelihood that workers on different projects / contracts will have different wages; and 2) contractors may be forced to raise the pay of workers whose wages are at or near $10 an hour to maintain the differential from newer or less skilled employees.

Contractors with unionized workforces tied to the minimum wage may be forced to renegotiate collective bargaining agreements. How else this will indirectly affect the construction and service industries remains to be seen.