The White House says this will improve contractor performance, citing a study finding that:
... 28 of the companies with the top workplace violations from FY 2005 to FY 2009 subsequently received federal contracts, and a quarter of those companies eventually had significant performance problems as well—suggesting a strong relationship between contractors with a history of labor law violations and those that cannot deliver adequate performance for the taxpayer dollars they receive. Because the companies with workplace violations are more likely to encounter performance problems, today’s action will also improve the efficiency of federal contracting and result in greater returns on federal tax dollars.Additionally, the executive order will protect companies that are already doing the right thing from having to compete with companies that are illegally cutting corners and endangering or cheating workers. In addition to encouraging all prospective federal contractors to follow labor law, the order will call for companies to include information about hours worked, overtime hours, and other details on pay stubs so that workers will have transparency about what they are being paid in relation to what they should be paid.
Obama previously signed executive orders raising the federal contractor minimum wage to $10.10 an hour, expanding equal pay protections, and prohibiting anti-LGBT discrimination by federal contractors.
Encouraging companies that want federal business to follow federal laws should be kind of a no-brainer, so it'll be interesting to see how Republicans and the corporate world respond to this—after all, Republicans tend to put labor laws in a special "optional" category. But aside from the specific content of the executive order, President Obama is definitely sending a message that he won't be intimidated away from getting things done as best he can while congressional Republicans block meaningful progress.