White House Issues Contractor Rules; Business Group Will Sue to Block Them

By Sherie Winston


After nearly four years of promises, the White House has issued rules that set new eligibility requirements for contractors seeking federal work. The plan, labeled by construction organizations and other opponents as "blacklisting" rules, will go into effect on Jan. 19, the last full day of the Clinton administration.

But even before the rule was published in the Dec. 20 Federal Register, the Business Roundtable claimed the regulation was "seriously vague, unfair and  costly" and said it will launch a challenge in federal courts. That lawsuit is expected to be filed on Dec. 21, says a Roundtable spokesman.

At issue is how much latitude a federal contracting officer would have to decide whether a firm bidding on a contract had a "satisfactory" record of complying with state and federal tax, labor, employment, environment and  anti-trust laws.

Stephen E. Sandherr, executive vice president of the Associated General Contractors argues that the rule "violates due process and [will] unnecessarily increase the burden on both the federal contractor and federal contracting officer."

Associated Builders and Contractors President W.Thomas Musser asserts that these regulations "illegally interfere with the contracting process, and put the agencies' contracting officers in the impossible position of interpreting labor law and other laws, areas in which they have no training or expertise." ABC is particularly worried about the regulations' potential impact in union "salting" cases.

But union officials support the new rules and contend they are necessary to weed out contractors who repeatedly violate the law.

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