high road contracting policy Archives - Shopfloor

Next OMB Head Told to Watch the ‘High Road’

By | Human Resources, Labor Unions | No Comments

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.

Federal Contracts are Not the Way to Change Labor Policy

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There had been some suspicion that the Director of the Office of Management and Budget, Peter Orszag, would announce support for the proposed “High Road Contracting Policy” in remarks at the Center for American Progress, a speech that addressed the Administration’s plans to reduce federal spending by managing costs at federal agencies.

This “high road” proposal would create a system where federal bureaucrats would score the employment practices of private businesses that seek contracts with the government. Proposals would be evaluated by these terms and would grant preferential treatment in award the bids on the basis of factors that aren’t related to the business’ ability to deliver the terms of the contract. Such a system creates barriers for smaller-sized employers to compete and driving up costs for taxpayers.

Thankfully, the OMB Director did not indicate support for the proposal in Tuesday’s remarks. We hope the issue’s absence means the Administration recognizes that such efforts would go counter to its stated goal of rein in federal spending.

Further the White House Taskforce on the Middle Class has expressed support for a policy proposal which would actually do the opposite of reining in federal spending – a goal that the OMB Director made quite clear in his remarks.

As we’ve noted previously, several groups have been pressuring the Administration to enact major policy changes by reconfiguring the way that the federal government does business with the private sector. “Progressive“ think tanks and labor unions have been clamoring for the President to sign an executive order that would create a “high road contracting policy” to place new requirements on companies that do business with the government. We hope that the Administration will recognize the flaws of such a misguided proposal.

High Road? Except for the Tolls, Check Points and Costly Detours

By | Human Resources, Labor Unions | One Comment

The Center for American Progress, some labor leaders and their allies on the Hill have been placing pressure on the Administration to implement significant changes on how the federal government does business with the private sector. These groups want a government-wide “High Road Contracting Policy” to be put into effect by an executive order. Such a Presidential edict would dictate specific terms of employment that contractors must have in place in order to receive preferential treatment for federal contracts.

This proposal would add further burdens onto an already complex federal contracting system that would discourage competition in federal contracts and place smaller-sized manufacturers and non-unionized workplaces at a disadvantage for federal contracts. Led by Sen. Susan Collins, ranking member of the Senate’s committee with oversight over federal contracting policy, several Senators recognized the dangers of this proposal and have urged the Office of Management and Budget to reject any “high road” changes.

The administration claims its goal is to maximize efficiency in federal contracting. However, previous executive orders enacted supposedly to achieve the same goal have actually done the opposite. Bidders who wish to provide goods or services to the federal government should be evaluated on their ability to provide and deliver on the terms of the contracts. This process fosters competition and allows the bidder that demonstrates the best value to be recognized when bids are accepted and awarded.

The proposed “high road contracting policy” is a further attempt to achieve goals of the jobs-killing Employee Free Choice Act by executive fiat. As Roll Call notes, a group of Members of Congress recently urged the President to issue such an executive order. But as fundamental matter of labor-management relations, this is a policy matter that should be considered by the policy-making branch of the federal government – the Congress. If the Administration seeks to raise the costs of federal contracting – costs ultimately borne by the taxpayer – it should make its arguments in Congress.

Davis-Bacon on Steroids

By | Labor Unions | No Comments

From The Wall Street Journal, an editorial, “Procuring the Union Agenda“:

In a novel variation on pay to play, the Obama Administration is planning to force companies to raise pay and benefits for workers if they want continued access to federal contracts. Waiting to cash in on the impending Executive Order are unions that would end up with a piece of the government’s $500 billion in annual contracts.

The government can’t steer contracts directly to the unions. But it can use its authority over how taxpayer money is spent to favor unions and their agenda. This is good news for Andy Stern and his Service Employees International Union. But not so good for job creation.

The proposed Executive Order is being drawn up by Joe Biden’s Middle Class Task Force. It would oblige government procurement agencies to give contracts to “responsible contractors” who pay workers well and offer higher health, pension, sick leave and other benefits.

The Journal argues that this scheme, enforced by “labor commissars” at each federal agency, would especially disadvantage small businesses unable to offer the full range of benefits larger companies can achieve.

Associated Builders and Contractors, representing companies painfully familiar with Davis-Bacon and project labor agreements, issued a news release last week in response to reports about the “high road contracting policy.” In it, ABC’s Geoff Burr, vice president of federal affairs, said:

The provisions outlined in media reports – as well as in documents from the Center for American Progress, big labor and other special interest groups promoting this policy – fly in the face of free and open competition.

Large and small nonunion construction contractors and their skilled employees – which make up more than 85 percent of the U.S. construction workforce – are the backbone of America’s construction industry. These hardworking men and women have a decades-long track record of meeting and exceeding existing government-determined wage and benefit laws, such as the Davis-Bacon Act, and contracting standards in the best-value evaluation process unique to the federal government’s procurement of construction services.

The proposal is baffling given the Administration’s stated emphasis on jobs creation. As Burr notes, the U.S. construction industry already suffers from an unemployment rate of 24.7 percent. Why would you increase costs on this important sector of the economy?