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Imagine that as a federal contractor charged with employment discrimination, your company must weigh settlement against disqualification for federal contracts if it loses in litigation. Consider the dilemma of a contractor faced with a union organizing drive, who may risk its federal business if it opposes the union. In a bid for AFL-CIO support of Al Gore’s presidential campaign, the Clinton administration proposed changes to the Federal Acquisition Regulations (FAR) that bars federal contracts to companies deemed "noncompliant" with employment laws. The American Electronics Association, representing high tech companies, blasted "the proposed blacklisting regulation" as "arbitrary, denying IT companies their due process rights, and ripe for abuse. [It] threatens to severely limit government access to the high-tech products and services produced by more than 4.8 million skilled U.S. workers at IT companies." With contractors targeting the federal IT market, organized labor is pushing the FAR amendments as a tool to organize the mostly non-unionized high tech employees. The proposal modifies FAR provisions that control awarding of contracts to "responsible" bidders, and authorize reimbursement of legal and consulting fees. Currently, a contractor may be declared ineligible if it is "debarred" for violating labor laws that apply only to government contracts. These include federal wage standards, affirmative action requirements, and disability protection. Debarment is based on due process and a formal administrative judgement. Under the "blacklisting" regulations, however, a contracting officer (CO) is charged with scrutinizing a company’s record and other "persuasive evidence" to form an opinion on its compliance with all employment and other laws, e.g., the National Labor Relations Act, OSHA, EEO requirements, and the Fair Labor Standards Act. Thus, procurement specialists will have to include and analyze unresolved allegations, complaints, charges, and agency rulings, in making a responsibility determination. As to changes in FAR cost principles, a contractor currently may be reimbursed for reasonable legal and consulting fees incurred in performing federal work. The amendments would prohibit reimbursement of any costs to influence employees regarding unionization, such as for advice to protect the employer’s interests in opposing an organizing campaign. The changes may also deny legal defense costs where a contractor is found violating any law even if most charges are dismissed, and in certain settlements. The National Alliance Against Blacklisting (NAAB), a business coalition, has formed to oppose the amendments. NAAB asserts that the changes would give unions, business competitors, and plaintiffs’ lawyers inappropriate influence over the contracting process. The coalition fears that the threat of blacklisting could be used in union organizing drives, litigation settlement negotiations, and collective bargaining to manipulate employers and force capitulation. All parties claim that their goal is to have federal contracts awarded to responsible companies. Critics of the amendments argue that the FAR already guard against violators of the laws that Congress choose to apply specifically to federal contractors, and that the amendments will work against recent efforts to streamline federal contracting. At a minimum, it appears that if Congress wants to use the procurement process to foster the complex public policies of employment and other laws, it should do so through legislation that provides contractors with due process protections. Using procurement specialists as employment law judges not only infringes on Congress’s duty to make laws, but will turn the procurement process into a labor-management battleground. © 1999 Jeffrey Berger REPRINTED FROM:
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