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New Rule Change Could Create Costly Bureaucratic Mess For Contractors

Unions, businesses and lawmakers couldn’t be more divided on a proposal Wednesday to change how federal contracts are rewarded, with some warning it will create an unnecessary burden on taxpayers.

The new set of rules, based on an early executive order by President Barack Obama, will require federal agencies to change how a contractor handles workplace safety and compensation before they will be granted or allowed to renew a federal contract. While unions argue it will help promote worker safety and fair compensation, some business groups and lawmakers warn the end result will be a costly bureaucratic mess.

The proposed rule change was issued by the Federal Acquisition Regulatory (FAR) Council along with a guidance memo issued by the U.S. Department of Labor.

“This proposed rule will help ensure that businesses that contract with the federal government lift standards for their workers,” AFL-CIO President Richard Trumka said in a statement. “Companies that mistreat workers should not be rewarded with taxpayer dollars, and this rule will help weed out bad actors who profit by denying workers their right to a safe job and a decent wage.”

“Not only is this rule a good idea, it’s also very necessary if you want businesses to be able to make a fair profit,” Service Employees International Union (SEIU) International President Mary Kay Henry added in a statement. “It’s impossible for responsible businesses to compete when scofflaw companies low-ball their bids because they plan to cut corners.”

The problems though, according to Associated Builders and Contractors (ABC), greatly outweigh the positives the rule change is supposedly supposed to have.

“This rule creates a murky federal acquisition system that is absurdly cumbersome and allows contracts to be awarded in a subjective nature by unelected bureaucrats,” ABC Vice President of Government Affairs Geoff Burr said in a statement.

“The ‘blacklisting’ proposal released today will unnecessarily complicate the federal acquisition process by adding undue subjectivity and may result in some of the best federal contractors being blacklisted from winning future contracts,” he continued. “Additionally, the administration’s latest assault on federal contractors via illegal executive overreach will result in more bid protests and more frequent and costly labor and employment disputes.”

“Taxpayers, contractors and their employees deserve a fair and transparent process that will award contracts to firms that will deliver the highest quality product at the best price, however, this proposal is a clear step in the wrong direction,” Burr added.

Some Republican lawmakers are also greatly concerned over the impact the rule change could have, noting it is designed to fix a nonexistent problem.

“Private employers who do business with the federal government provide important services to America’s taxpayers and are overwhelmingly responsible and law-abiding,” Reps. Tim Walberg and Phil Roe said in a joint statement.

“Bad actors who choose to operate outside of the law and deny employees basic protections should not be rewarded with taxpayer dollars,” their statement continued. “That is why we already have a system in place to deny federal contracts to these bad actors.”

“The committee held a hearing on the president’s executive order in February and found that its proposed structure would be redundant, unworkable, and unnecessary,” the statement also noted. “We also learned that it would inflict harm on small businesses, workers, and taxpayers.”

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