Make vendors accountable
For most of the 1990s, the Clinton administration tried to clean up government procurement, stream--lining it in hopes of curtailing wasteful and abusive spending on information technology and other products. Now it's the private sector's turn.
A revision to a rule published in the Federal Acquisition Regulation last month gives agencies the power to reject a company's bid on government work if the agency has determined that the company has violated federal tax, labor, safety, environment or antitrust laws. If properly administered, the rule will bring fairness and integrity to government contracting.
Of course, as with any rule, agencies may abuse their power. The rule allows agencies to consider accusations of wrongful acts, but a company's past violations need not be proven in court. That leaves a lot of room for interpretation. Business lobbyists argue that an agency can blacklist a company too easily. And vendors should have some recourse if they believe an agency acted unfairly.
Still, most of the public would agree that the rule is a rational one. Who wants their tax money going to a company that shows disregard for federal laws? The argument that the laws are not relevant to procurement is faulty. The U.S. government considers a nation's record on human rights before granting favored nation status for trading because the public understands that giving a country your business is a tacit approval of how it conducts itself.
Also, why do companies give money to build community baseball fields when those fields have nothing to do with their business? Because the giving engenders goodwill and makes for good corporate citizenship.
For federal vendors that run clean operations — the vast majority of contractors — the revised rule should not be a concern. Does government sometimes abuse the power it has? Of course. So it is vital that agency procurement officials use unbiased judgment in applying the revised rule and make sure they are convinced that violations have occurred. That is the only way to improve the credibility of the procurement process.