AGC, ABC document Obama order’s certain harm to competition, small businesses

Sources: Associated General Contractors of America, Associated Builders & Contractors, Washington, D.C.; CP staff

ABC and AGC have been among the most vocal “Fair Pay and Safe Workplaces” critics since President Obama added it to his expansive executive order roster in June 2014. Response to the Labor Department and Federal Acquisition Regulatory Council announcement of a final rule implementing the order show neither group changing its tune.

“[The] flawed blacklisting final rule will create a murky and needlessly subjective procurement process that will result in fewer qualified and responsible contractors bidding on federal contracts,” says ABC Vice President of Regulatory, Labor & State Affairs Ben Brubeck. “Upon initial review, it appears that rather than working toward improving the federal government’s existing suspension and debarment system, the administration has finalized a proposal that is duplicative and cumbersome and will result in less competition for taxpayer-funded contracts.

“The final rule fails to address key concerns raised by ABC and other stakeholders that would boost small business participation and promote awarding contracts based on merit to responsible firms that can deliver the highest quality product at the best price. ABC supports a level and transparent playing field for federal contractors and believes unethical firms should be held accountable. Our initial concerns regarding the proposal’s stripping of due process rights while also adding unwarranted uncertainty by empowering bureaucrats to subjectively pick winners and losers in the federal contracting marketplace remain.”

“[The new measure] allows a federal contracting official to give greater weight to the same safety violations depending on which firm was accused of committing them,” adds AGC CEO Stephen Sandherr. “Such subjective criteria opens the door to punishing federal contractors based on which political, social or labor causes they support, instead of their safety performance or treatment of workers.”

“This new rule will make it extremely difficult for many firms, particularly smaller ones, to continue working with the federal government. While all federal contractors will face difficulties finding ways to deal with the added new compliance and risk costs, smaller firms especially will likely decide the risks far outweigh the reward. As a result, an administration that frequently claims to champion the cause of smaller business will have yet again made it difficult for them to perform federal work.”

“Few other organizations have fought harder, for longer, or more successfully than the Associated General Contractors of America to make sure honest firms aren’t forced to compete with bad firms,” Sandherr observes. “The last thing any of our members want is to compete against a firm that cuts corners on safety or fails to properly compensate hard working craft people.”

He and Brubeck assure that AGC and ABC will explore challenges through legislative and judicial avenues in response to the final rule implementing the blacklisting order.


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