U.S. Chamber Urges Congress to Take Action Against Sweeping New Procurement Rule

WASHINGTON, D.C.—The United States Chamber of Commerce today urged the Congress to support newly introduced Senate legislation (S. 2986) that would block the Clinton Administration from issuing a controversial, new procurement rule, or "blacklisting" rule, that businesses criticize as arbitrary and ambiguous, lacking adequate standards or guidance.

Without congressional action, the new rule would effectively "blacklist" companies by allowing government agents to disqualify them from receiving government contracts if they do not have a "satisfactory" record of compliance with employment, tax, antitrust, environmental or consumer protection laws. However, there is no definition of what would be considered satisfactory, according to the Chamber.

"This procurement rulemaking is flawed from top to bottom," said Bruce Josten, Chamber executive vice president of government affairs, speaking at a Senate press conference. "The Chamber strongly supports S. 2986 and other legislative efforts to ensure that the rule does not go forward.

"Under the new rule, government agents could wield virtually unlimited power in deciding which companies can compete for the government's business," Josten said. "Even the best-intentioned business can get caught up in the vast 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.

Small businesses, which often have minimal legal assistance, are especially vulnerable to being ensnared in unintended, technical violations and, ironically, also are the least able to hire legal counsel to prove their innocence, Josten added.

The U.S. 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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