U.S. Chamber Supports Repeal of Sweeping Government Procurement Rule

WASHINGTON, D.C. – The United States Chamber of Commerce commended the Bush administration today for its repeal of a controversial procurement rule issued in the final days of the Clinton administration that would have effectively "blacklisted" companies from doing business with the federal government.

"This rule gave government agents blanket discretion to blacklist federal contractors based on subjective and arbitrary notions of satisfactory compliance with any federal, state, or even foreign law," said Randel Johnson, Chamber vice president for labor and employee benefits. "Mere allegations of wrong-doing could prevent a business from winning a federal contract."

If the blacklisting rule had gone forward, federal contracting officers would have been instructed to consider anything they thought credible in evaluating a company's record. This would have included unproven, pending or alleged violations in administrative complaints or civil cases.

"Government agents could have wielded virtually unlimited power under this rule," Johnson said. "The number of laws, pages of regulations and court cases coming within this regulation was countless; and government contracting would have become even more complex, cumbersome and protracted than it already is."

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 Chamber housed the National Alliance Against Blacklisting, chaired the lobbying efforts that resulted in the U.S. House of Representatives passing a prohibition against the rule on July 20, 2000, and testified on hearings on June 18, 2001.

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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