Council puts 'blacklisting' on hold

FAR rule on contractor responsibility

The Federal Acquisition Regulation Council officially put on hold Tuesday a rule it calls "the most controversial ever published by the FAR Council" — the requirement for agencies to consider vendors' ethics when awarding contracts.

The council published the final contractor responsibility rule, better known to industry as the "blacklisting" rule, on Dec. 20, 2000, and it went to into effect Jan. 19. It allows the FAR to require that agency contracting officers take into consideration a vendor's record of business integrity and ethics, including the vendor's record in legal matters such as employment, environmental, antitrust and consumer protection.

The council has suspended the rule for 270 days to reassess its advantages and disadvantages and determine if the benefits are outweighed by the burdens placed on contractors and contracting officers, according to a Federal Register notice published Tuesday.

The suspension follows another move to delay the rule by the Civilian Agency Acquisition Council. Agencies started incorporating the rule into their contracts in January. But recognizing the concerns voiced in more than 1,800 comments received by the FAR Council from government and industry, the CAAC sent a memo Jan. 31 to agency heads recommending that they put implementation of the rule on hold until July 19.

President Bush has stated several times that he would look to rescind the rule, which he felt had been pushed through at the last minute by the Clinton administration, and the White House this week applauded the move by the council.

"What we have right now is that there are strong measures in place to address law-breaking contractors who should not receive federal contracts, and this administration strongly supports strict procurement standards," said Scott McClellan, a White House spokesman. "But we believe that that rule was overly broad and onerous, so now it is going through a review, so we can determine the best step to take as we move forward."

The council is requesting comments on the suspension and the proposal to permanently waive the rule. Comments should be submitted by mail to the FAR Secretariat at the General Services Administration or by e-mail at farcase.2001-014@gsa.gov by June 4.

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