Next OMB Head Told to Watch the ‘High Road’

President Obama’s nominee to serve as director of the Office of Management and Budget, Jacob Lew, went before the Senate Homeland Security and Government Affairs Committee for a confirmation hearing today, and the discussions turned to federal contracting. The committee’s ranking Republican, Sen. Susan Collins of Maine, raised several questions and objections to an Obama Administration’s initiative that goes by the misleading name, “High Road Contracting Policy.”

As legislative prospects for union leaders’ agenda on Capitol Hill wane, the Obama Administration looks to enact organized labor’s agenda through executive actions. This so-called “High Road” contracting policy is a good example, because it could give unionized businesses an advantage over non-union businesses even if their bids came in as more expensive.

The policy would accomplish that goal by awarding federal contracts on the basis of factors unrelated to the best value proposition of bids. The way it’s being developed suggests the Administration wants to circumvent Congress by issuing an Executive Order that builds on the Clinton-era government contracting “blacklisting” effort. Indications are that the “High Road Contracting Policy” may establish a new system of mandatory employment standards for companies to compete for federal contracts, prohibit companies from seeking federal contracts if they face allegations of employment law violations – an allegation would be enough – and to create additional barriers to small businesses that seek government contracts.

Responding to Sen. Collins, Lew said he was unaware of any such policy. The Senator said she had serious concerns with any proposal that would put small business at a disadvantage in seeking federal contracts. More importantly, the Senator warned Lew that such a policy should not be implemented through executive fiat, but would require Congressional approval. In response, Mr. Lew reaffirmed his commitment to fair competition and federal contracting opportunities for small business.

We hope that the Obama Administration heed Senator Collins’ warning, recognize the flaws in such a policy and abandon any effort to develop such a misguided proposal.

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