If Not Card Check, Then More Costly Federal Contracts

Bret Jacobsen in Forbes.com, “Everyday Higher Prices,” a commentary on the “high road” federal contracting standards:

It’s just the latest effort to increase costs on taxpayer projects in the name of pushing more money to labor unions.

Reports this week of the new proposal are raising eyebrows. Though details are sketchy, here’s the general idea: The Obama administration is attempting to alter the scoring system currently used to evaluate government contractors and suppliers.

The new system would provide additional points for so-called “high road” employers who pay wages and benefits above minimum standards. (Note that the new requirement is not about providing quality above minimal standards; employers simply have to pay more.) Thus, competition in bidding becomes a tangled race to see who can charge the most to cover higher labor costs.

The costs of this favor to Big Labor would be borne by the taxpayers, paying the direct costs of more expensive contracts and indirect costs from inefficiency.

The recent report from the White House Task Force on the Middle Class foreshadowed this major change in federal contracting. From page 23, the section entitled “Responsible Federal Contracting.”

The Federal Government spends over half a trillion dollars a year on contracts for goods and services, generating employment for tens of millions of workers. However, there are inadequate controls on the records of firms who get these contracts and on the quality of the jobs these contracts create.Ignoring these factors has negative implications, not only for the workers on these contracts, but for the quality and efficiency of services rendered. For these reasons, the Task Force has participated in a review process to identify ways to reform the procurement process to increase the quality of both the services procured and the jobs created under Federal contracts.

The Task Force recognizes that contracts should not be awarded to irresponsible sources with unsatisfactory records of business ethics, including noncompliance with labor and employment, tax, fraud, and consumer protection laws. We also recognize that substandard wages and benefits can have negative impacts on employees’ productivity and stability, which in turn can reduce the quality of performance on Federal contracts.

We expect to produce shortly some new recommendations to bring these ideas into practice.

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