Should Congress withdraw the blacklisting rule, which changes the Federal Acquisition
Regulation so allegations of unsatisfactory business practices can blacklist companies
from federal contracts?
Why it's important
The day before former President Clinton left office, he enacted the blacklisting
rule, which empowers agency contracting officers to temporarily or permanently debar
federal contractors. Under this rule, federal contractors can be blacklisted for
unsatisfactory business practices regarding labor and employment laws, including
those related to the National Labor Relations Act, Occupational Safety and Health
Administration, wages and hours, and employment discrimination. The rule also includes
environment, tax, antitrust and consumer protection categories to determine whether
a bidder is a responsible contractor.
During the 1970s, organized labor pushed to create government blacklists as part
of a broader labor law reform package, but Congress did not pass the measure. There
have been subsequent attempts in Congress to pass stand-alone blacklisting legislation
that also have failed. Organized labor pressured the Clinton administration to bypass
the legislative process and issue blacklisting regulations through the General Services
Administration, Department of Defense and NASA.
In late March, the Bush administration suspended the blacklisting rule. The suspension
began on April 3 and is effective for nine months or until the rule is revoked,
whichever comes first. The Bush administration currently is seeking comments on
a proposal to revoke the rule. The past two comment periods on this issue prompted
many letters, including NRCA's comments, with 90 percent of them opposing the rule.
Key issues raised by the rule are as follows:
All federal contractors, regardless of company or contract size, can be blacklisted.
The federal procurement system, which awards approximately $200 billion in federal
contracts per year, will be highly politicized and subject to coercive whims.
Procurement officials will have subjective power, which is at odds with the U.S.
NRCA opposes the blacklisting rule because it will distort the federal procurement
process through allegations of unsatisfactory business practices aimed against both
union and open-shop contractors. The potential for corruption under such regulations
may be limitless.
Click here to view NRCA's comments
to the General Services Administration.
The other side
Proponents of blacklisting regulation argue that the rule will prevent the government
from awarding contracts to companies that do not respect worker rights or adopt
sound workplace standards. They believe blacklisting is necessary even though safeguards
against awarding contracts to such companies already exist in the federal procurement