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Proposed "Blacklisting" Regulations, September 1999

The issue

Should Federal Acquisition Regulations be changed so that allegations of "unsatisfactory" business practices could "blacklist" companies from federal contracts?

Why it's important

On July 9th, the Clinton Administration issued proposed federal blacklisting regulations. The proposed regulations would empower agency contracting officers to blacklist (temporarily or permanently debar) federal contractors if there is "persuasive evidence" of alleged "unsatisfactory" business practices regarding labor and employment laws, including the National Labor Relations Act, OSHA, wage and hour, and employment discrimination laws. The proposed regulations also include environment, tax, antitrust, and "other consumer protections" as categories to determine if the bidder is a "responsible contractor."

In the 1970s and 1980s, organized labor pushed to create government blacklists as part of overall Labor Law Reform, culminating in failed legislative attempts. In the previous Congress, Senator Richard Durbin (D-IL) and Representative Lane Evans (D-IL) sponsored blacklisting legislation that failed, and they have introduced similar bills this Congress. Organized labor, however, is pressuring the Administration to bypass the legislative process and issue blacklisting regulations through the General Services Administration, DoD and NASA.

On February 18, 1999, Vice President Al Gore reaffirmed the Administration's commitment to issue blacklisting regulations in remarks to the AFL-CIO Executive Council. According to an AFL-CIO memorandum, under the Vice President's proposal "government will evaluate whether a bidder for a government contract has a satisfactory record of labor relations and other employment practices in determining whether or not the bidder is a 'responsible contractor' eligible to receive a particular government contract." Key issues raised by the proposal are:
  • All federal contractors, regardless of company or contract size, could be blacklisted.

  • The federal procurement system, which awards approximately $200 billion in federal contracts per year, would be highly politicized and subject to coercive whims.

  • Procurement officials would have subjective power, akin to being judge and jury, which is at odds with America's legal system.
NRCA's position

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 would be limitless.

Please see NRCA's comments, submitted Nov. 2, 1999, to the General Services Administration.

The other side

Proponents of blacklisting regulations state that implementation will ensure that government won't award contracts to companies that don't respect worker rights or adopt sound workplace standards.

(September 1999)


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