United States Chamber of Commerce Slams Procurement Rule

WASHINGTON, DC – In comments filed today with the General Services Administration, the United States Chamber of Commerce charged a proposed federal procurement rule is unconstitutional, depriving businesses merely accused of wrongdoing an opportunity to be heard before losing out on federal contracts.

"The Administration's blacklisting regulation is arbitrary and ambiguous," said Randel Johnson, United States Chamber of Commerce vice president for labor and employee benefits. "The proposed rule provides no standards, no guidance and no explanation. The Chamber will do whatever is necessary to block this politically motivated policy."

The new rule would effectively "blacklist" companies from eligibility to receive government contracts if they do not have a "satisfactory" record of compliance with employment, tax, anti-trust, environmental or consumer protection laws. Companies that are accused of violating federal regulations – even if those accusations are false, malicious or unproven – could be denied government contracts, Johnson noted. Federal contracting officers would become the judge and the jury in deciding who can compete for the government's business.

"Even the most well-intentioned business can get caught in the maze of confusing and often conflicting agency rules and regulations," said Johnson. "Ask the Clinton Administration, which had 5,700 labor violations filed against it last year and 28,000 discrimination complaints in 1997.

Organized labor often files frivolous charges to pressure employers, Johnson said. "This rule, if adopted, is a stacked deck for coercive union tactics, since any merely reported violation could disqualify an employer from government contracts. The fact the Administration announced this initiative before the AFL-CIO is not coincidental."

The General Accounting Office estimates that companies with federal contracts and subcontracts employ 23 million American workers. A federal contracting officer's subjective decision to deny a company a federal contract, based on complaints that could be unfounded or politically motivated, could put that company and its employees out of business, according to the Chamber, and would hit small businesses especially hard.

The Chamber noted this regulation represents an end-run around Congress, which has specifically considered and rejected similar legislation.

The United States Chamber of Commerce is the world's largest business federation, representing more than three million businesses and organizations of every size, sector and region.

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