NRCA's comments regarding proposed "blacklisting" regulations, November 1999
On Nov. 2, 1999, NRCA submitted comments to the General Services Administration
opposing changes to federal procurement regulations proposed by the Clinton Administration.
The new regulations would empower federal agency contracting officers to subjectively
blacklist (debar) contractors if there is "persuasive evidence" of alleged "unsatisfactory"
business practices regarding labor laws, the environment, taxes, antitrust and "other
consumer protections." NRCA’s comments follow.
Nov. 2, 1999
General Services Administration
FAR Secretariat (MVR)
1800 F Street, NW, Room 4035
ATTN: Laurie Duarte
Washington, DC 20405
RE: FAR Case 99-010
Dear Ms. Duarte:
The National Roofing Contractors Association (NRCA) opposes changes to the Federal
Acquisition Regulations as proposed in FAR Case 99-010. The proposed regulations
would give federal agency contracting officers (COs) unjustified subjective power
to blacklist (debar) contractors if there is "persuasive evidence" of alleged "unsatisfactory"
business practices. Such practices would relate to the National Labor Relations
Act, Occupational Safety and Health Act, Fair Labor Standards Act, Civil Rights
Act, and other statutes. Additional categories to qualify a "responsible contractor"
would include practices regarding the environment, taxes, antitrust, and "other
consumer protections." A potential contractor would also be required to have "the
necessary workplace practices addressing matters such as training, worker retention,
and legal compliance to assure a skilled, stable and productive workforce."
In the 1970s, organized labor pushed to establish government blacklists as part
of its legislative agenda. Blacklisting didn't make it through Congress then, and
in the last 30 years it has failed to pass irrespective of which party was in control
of Congress. In addition to rejecting blacklisting when packaged as a labor bill,
Congress has rejected blacklisting in major procurement laws enacted over the years
revamping nearly every aspect of federal procurement policy.
Nonetheless, Senator Richard Durbin (D-IL) and Representative Lane Evans (D-IL,
17) introduced a blacklisting bill in the 105th Congress and a bill in this Congress.
NRCA opposes this blacklisting bill, but agrees with what appears to be Senator
Durbin's and Representative Evan's belief that Congress is the proper forum to determine
such changes to procurement policy. The Congress, not the bureaucracy, is the appropriate
forum to consider, approve or deny the proposed changes contemplated in FAR Case
NRCA is an association of roofing, roof deck and waterproofing contractors. Founded
in 1886, it is one of the oldest associations in the construction industry and has
more than 4,500 members in all 50 states. They employ more than 100,000 workers
and perform approximately 60 percent of all roofing work in America. All NRCA contractors
are small, privately held companies. The average NRCA contractor has 35 workers
in peak season, with $3.5 million in sales annually.
NRCA worked with other small business associations in the 104th Congress to help
pass the Small Business Regulatory Enforcement Fairness Act (SBREFA), enacted in
1995. SBREFA provided judicial review to the 1980 Regulatory Flexibility Act, which
requires that federal agencies study the potential adverse consequences of proposed
regulations on small businesses. There can be no doubt that the proposed blacklisting
rule would impact the small business community, given that small businesses, including
NRCA members, were awarded federal government procurements with a value of $33 billion
However, in the July 9, 1999 Federal Register notice soliciting comments, GSA, DoD
and NASA certified, "This proposed rule is not expected to have a significant economic
impact on a substantial number of small entities within the meaning of the Regulatory
Flexibility Act, 5 U.S.C. 601, et seq., because most contracts awarded to small
entities do not involve use of formal responsibility surveys." GSA, DoD, NASA, and
the Office of Federal Procurement Policy failed to comply with requirements under
SBREFA and the Regulatory Flexibility Act in the proposed rule.
Under the proposed regulations, government contracting officers would have the power
to deny federal contracts to companies that are merely accused of violating employment
and other laws. All federal contractors, regardless of company or contract size,
could be blacklisted this way. COs would have subjective power akin to being judge
and jury that is at odds with America's legal system. Contractors would also be
subject to potential political pressure from third parties such as organized labor,
for example, in collective-bargaining disputes, thus denying full, fair and open
competition and due process rights.
But the blacklisting rule goes beyond labor issues. All sorts of allegations could
be filed against any and all employers without their knowledge, and blacklisted
employers would be unable to appeal the COs' decisions. Union and open shop, large
and small, and non-profit companies would be affected. And even the best-intentioned
employers can get caught in the maze of confusing and often conflicting agency rules
and regulations. The Code of Federal Regulations concerning employment laws alone
is over 4,000 pages in length.
Overregulation of Roofing
In 1994, the House Republican Research Committee's Task Force on Competitiveness
held a special order on the House floor concerning overregulation of the roofing
industry. Representative Tom DeLay (R-TX, 22) stated, "Although regulations are
often well-intended, in their application too many are overly oppressive, unreasonable,
and even irrational. I'd like to give you a few examples: First, last May, Competition
Roofing, Inc. of Houston, TX, was visited by an OSHA inspector and was cited 23
times for a grand total of $13,200 in fines. Its violations? A cut in the outer
insulation of an extension cord that had been taken out of service racked up three
citations, while a bent rung on the bottom of a ladder was worth four. In addition,
a $400 fine was issued for a splintered handle on a broken shovel that had been
placed in the back of a truck after it had been broken." DeLay discussed several
other examples during the special order, which is in the Congressional Record -
House, September 22, 1994, pp. H9533 - H9536.
The examples illustrate how common sense can be eclipsed in enforcement of regulations
by federal inspectors. The subjective nature of the proposed procurement rule would
add more uncertainty to the regulatory process for small businesses.
NRCA opposes the Administration's blacklisting proposal because it would distort
the federal procurement process through allegations of "unsatisfactory" business
practices aimed against both union and open shop contractors. The potential for
mischief under such regulations against all federal contractors or potential federal
contractors would be limitless.
Craig S. Brightup
Associate Executive Director, Government Relations