U.S. Chamber Files Blacklisting Lawsuit

WASHINGTON, D.C. – The United States Chamber of Commerce today filed suit in the U.S. District Court for D.C. to overturn the Clinton administration's recent procurement regulation, charging the so-called blacklisting rule is "fraught with errors" and violates businesses' constitutional right to due process.

"Employers cannot be denied access to government contracts, without an opportunity to defend themselves," said Thomas Donohue, Chamber President and CEO. "The Clinton-Gore administration cannot ignore the Constitution, no matter how many promises they have made to the labor unions."

The Chamber, together with the Business Roundtable and other associations, charge in their suit that the rule is based on vague, discretionary standards, has no rational basis, and no evidence that its benefits would offset the enormous cost. Further, the government failed to consider the rule's impact under the Paperwork Reduction Act.

Despite objections from federal agencies and departments, the administration has given contracting officers virtually unlimited power to decide who can compete for the government's business – worth more than $200 billion every year. Government contracting officers lack the necessary expertise to determine compliance with the thousands of laws covered by the rule, the lawsuit points out.

"The rule is indefensible and loaded with errors," said Donohue. "And by including the requirement that employers must comply with foreign laws, even the most well-intentioned business will be unlikely to avoid getting caught in the maze of confusing and often conflicting agency rules and regulations."

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, could put that company and its employees out of business, according to the Chamber, and would hit small businesses especially hard.

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. It is represented in the case by its legal affiliate, the National Chamber Litigation Center.

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