“CONTRACTOR BLACKLISTING” RETURNS IN LEGISLATION AND RULEMAKING

Contractors with long memories may recall several past attempts to prohibit the government from doing business with companies either accused or adjudged of having committed labor, environmental, or other offenses, often not related to their performance on a government contract.  A rule was in place that would have “blacklisted” such contractors for several weeks immediately prior to President G.W. Bush’s inauguration.  While that rule was removed, there are multiple new attempts that would prohibit the government from doing business with certain companies.  This time, the focus seems to be around those found to be in violation of federal labor laws.  The Department of Agriculture kicked off the latest round this past February when it proposed to ban that agency from doing business with companies violating almost any type of labor law.  While Agriculture is re-working its proposal after industry criticism that the original was overly broad, the matter is still definitely open.  Agriculture isn’t the only place that contractor’s need to monitor.  There are at least two amendments attached to the House version of FY’23 Defense Authorization bill that would either prohibit the government from doing business with any company with a labor law violation in the past three years (barring remedial action) or give a preference to companies that “meet certain requirements pertaining to labor relations.”  While most people agree that the government should do business with good corporate citizens, the concern remains that many of these provisions would be subjective in nature.  AG’s initial rule, for example, would have penalized companies across the board, whether violations were large or small.  For this and other initiatives, contracting officers would be put in the position of having to determine what “certain requirements” would be that could garner a company a preference, determine if sufficient remediation of a past violation was sufficient to retain eligibility for a contract award, or decide whether a violation eliminated the company from consideration.  None of these are areas in which the acquisition workforce has received training.  The “blacklisting” front is just one more area where contractors must pay attention to the policies being formulated around them that will impact their government business.  Make sure you know and that your company takes action to ensure that its concerns are known in Congress and to appropriate regulatory officials.