U.S. Chamber Urges Repeal of Controversial Government Procurement Rule

WASHINGTON, D.C.-The United States Chamber of Commerce today urged repeal of a controversial procurement rule issued in the final days of the Clinton administration that would effectively "blacklist" companies from doing business with the federal government.

"This blacklisting rule gives government agents blanket discretion to judge what is an undefined unsatisfactory record of compliance by a company with any federal, state, or even foreign law, and then disqualify any business from competing for government contracts based on that judgment," said Randel Johnson, Chamber vice president for labor and employee benefits, testifying before the Federal Acquisition Regulatory Council. "Mere allegations of wrong-doing could prevent a business from winning a federal contract."

If the blacklisting rule goes forward, federal contracting officers would be instructed to consider anything they deem credible in evaluating a company's record. This includes unproven, pending or alleged violations in administrative complaints or civil cases.

"Government agents could wield virtually unlimited power if this rule stands," Johnson said. "The number of laws, pages of regulations and court cases coming within this regulation is countless. The number of potential situations of alleged, technical and more substantive violations under these laws and regulations is beyond countless."

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 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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