Letter to the Editor
I write to take issue with some of the assertions made in your Jan. 8 editorial,
"Make
vendors accountable," which concludes that the "blacklist" rule published
by the Clinton administration late in December 2000 will improve the credibility
of the procurement process.
Your editorial — which astutely warns of the potential for contracting
officers to abuse their newfound powers — nonetheless includes several questionable
statements. For starters, I dispute the contention that these regulations
will bring "fairness" to government contracting. I don't think they will — but I do fear the changes will have a disastrous impact on small businesses,
colleges and universities that contract with the government and, indeed,
will mark a severe step backward in the area of procurement reform.
Second, your piece rhetorically asks, "Who wants their tax money going
to a company that shows disregard for federal laws?" The answer, of course,
is nobody. No one disputes that the federal government should do business
only with ethical companies that adhere to federal laws. But let's be clear:
Existing acquisition rules already provide a strong remedy of debarment
for errant contractors and the administration has not made the case that
these changes are needed. In that sense, this is a solution to a nonexistent
problem.
An amendment I introduced with Rep. Jim Moran (D-Va.) — which easily
passed the House of Representatives before being stripped in a conference
committee — simply would have delayed implementation of the new rules until
the General Accounting Office could examine whether they're needed. Such
data has never been produced.
Third, your editorial asserts that "If properly administered, the rule
will bring fairness and integrity to government contracting." The first
three words are key, as I am not at all optimistic that these regulations
will or can be administered in an unbiased, fair and informed way. The changes
make it easier for contracting officers to deny federal contracts to businesses
by altering the criteria used to determine whether a potential contractor
is responsible. The new rule, in a nutshell, gives contracting officers
much greater authority to disqualify a contractor from doing business with
the federal government.
How? Current law states that contractors must have a satisfactory record
of integrity and business ethics and the ability to perform the contract.
The changes would have allowed a contracting officer to require a contractor
to show "satisfactory compliance" with federal laws — including tax, labor,
employment, environmental and consumer protection laws. The regulations
would effectively blacklist companies from eligibility if they do not follow
arbitrary standards defined as "satisfactory compliance" with federal laws.
Inevitably, "satisfactory compliance" will be determined subjectively, unfairly
politicizing the contracting process.
Finally, your editorial claims that "For federal vendors that run clean
operations...the revised rule should not be a concern." I could not disagree
more strongly. Even some of the administration's top procurement officials
have questioned the wisdom of the changes. Among others, the General Services
Administration has said it will find implementation of the rule "extremely
difficult," citing "inconsistent application of the language in the rule"
and "additional time and effort expended on the acquisition process." GSA
concluded that the "proposed rule appears punitive, rather than designed
to protect the government."
Would-be vendors, in fact, have great cause to worry about the new regulations.
First, "non-responsibility" is too easily triggered. For example, an initial
finding from an administrative law judge or a mere complaint from a federal
agency could constitute the "credible information" cited in the new regulation.
The new regulations also present due process concerns. Firms could be
denied the chance to compete for a contract based on a decision by an administrative
law judge, without a hearing.
And the administration's proposal also invites mischief and abuse by
third parties seeking a business advantage. Allegations could be made frivolously
to place a competitor at a disadvantage.
I can't put it any better than the plaintiffs did in the first lawsuit
filed against the government after the regulations were released. They said
the administration "has acted arbitrarily by failing to articulate any rational
basis or need for this significant change in the responsibility standards;
ignoring the concerns raised by the government's own procurement professionals
that the government lacks the expertise and resources needed to implement
the rule; failing to demonstrate that any benefits of this change offset
its enormous costs; and irrationally removing the requirement of a nexus
between responsibility and a contractor's ability to perform a particular
contract."
In other words, this is a bad rule. Period.
Why else would the administration publish the controversial regulation
during its waning days, making them go into effect on Jan. 18, 2001 — two
days before president-elect Bush takes office? The administration's strategy
was clear: Publish these wrongheaded rules before Bush takes office and
at a time of year when Congress will not be able to intervene.
This was midnight-hour, back-room policy-making at its worst. The vote
in the House last year made it clear that a majority of my colleagues understand
that the changes impose vague new standards for contracting officers and
do not provide them with guidance in making "responsibility" determinations.
They see that this rule could substantially raise the bar over which small
businesses will have to hurdle in order to get federal contracts.
Rep. Tom Davis (R-Va.)