- The Washington Times - Wednesday, September 27, 2000

A group of Senate Republicans is trying to stop the Clinton administration from adopting a rule that would make it harder for companies that break federal labor laws to win government contracts.

Sen. Tim Hutchinson of Arkansas and other senators introduced a bill yesterday that would prevent the White House from implementing the proposed regulation until the congressional General Accounting Office studies its potential impact.

The senators said the proposal gives an unfair advantage to unionized companies. They accused the administration of trying to aid Vice President Al Gore, the Democratic presidential nominee, who promised labor leaders three years ago that the administration would stiffen contracting rules.

Several business groups, including the U.S. Chamber of Commerce, also are lobbying against the proposal, saying it would hurt most of the top companies involved in federal procurement, a $200-billion-a-year industry that employs one-fifth of all workers.

"It's fundamentally unfair and politically driven," said Randy Johnson, vice president of labor and employee benefits for the U.S. Chamber of Commerce.

The administration has said the rule only provides guidance for federal contracting officials, and isn't binding in picking winning bidders.

Opponents cite a July study by the Employment Policy Foundation, a business-backed think tank, that said 23 of the top 25 federal contractors including Boeing Co. and General Electric Co. could lose $73 billion worth of business under the proposal.

The opponents also point to two federal agencies the Environmental Protection Agency and the General Services Administration (GSA) that have said the proposal is flawed.

"The proposed rule, if implemented, will undermine the progress the government has made in acquisition reform and streamlining … [and] discourage commercial companies from selling to the government," Al Matera, director of the GSA Acquisition Policy Division, wrote in public comments filed in August.

The proposed rule, issued by the administration in June, would allow agencies to declare a company ineligible to bid on a contract if a federal body, such as the National Labor Relations Board, has found the company violated federal law.

Currently, any of the roughly 300,000 federal contractors can be ruled ineligible on a bid if they violate federal laws governing labor relations, employment discrimination and workplace safety. Rejection isn't automatic because companies first can exhaust all appeals in the courts or before an agency's administrative-law judges.

Under the proposed new rule, agencies could decide a company is ineligible if there's "pervasive evidence" short of a formal ruling that it broke federal law.

The new proposal also says agencies should take into account compliance with other areas of law, including environmental rules, tax laws, consumer protections and antitrust law.

The proposal also requires companies to certify in writing that they haven't been convicted of felonies during the previous three years.

"This places enormous power into the hands of federal procurement officers," said Charley Maresca, director of labor relations for Associated Builders and Contractors Inc., an Arlington, Va.-based trade group.

The administration is now collecting public comments on the proposal. Knowledgeable sources who spoke on the condition of anonymity said the administration plans to adopt the rule between the last week of October and the presidential election on Nov. 7.

The sources also said the administration has ordered federal agencies not to discuss the proposal with reporters.

Mr. Hutchinson said the gag order "pulls the veil off any pretense that this is purely political."

A reporter's telephone calls to the AFL-CIO were not returned yesterday.

Similar legislation has been introduced in the House of Representatives. Backers of both versions say there's little chance the legislation will be passed before members of Congress finish their work and return home to campaign for re-election.

Mr. Johnson, of the U.S. Chamber, said trade groups are prepared to sue the administration, contending the White House did not comply with the federal standards that govern executive measures when drafting the proposal.

• This article is based in part on wire service reports.

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