Bush Revokes Blacklisting Rule

The Bush administration this week repealed a controversial federal rule that would have put new restrictions on the government procurement process. Notice of its revocation was published in the Dec. 27 Federal Register.

The so-called blacklisting rule, issued in the last days of the Clinton administration, went into effect Jan. 19, 2001, but was suspended soon thereafter by President Bush. Now it has been taken off the books altogether, pleasing industry executives and dismaying organized labor.

The rule would have required contracting officers to take into account bidders' compliance with labor, tax, employment, antitrust, environmental and consumer protection laws when determining if a company is a responsible business and, therefore, eligible to win contracts.

"Today's announcement is a victory for fairness," said John Dillon, chairman of the Business Roundtable. "This rule ensures federal contract decisions will be judged on competency rather than innuendo and hearsay."

The Business Roundtable, a Washington-based association of chief executive officers, filed suit to overturn the rule on the grounds that it would deny federal contracts to bidders based on arbitrary decisions and would violate due process protections for contractors.

Regulation supporters, including organized labor, said it would protect the government from unscrupulous vendors. Opponents, including information technology industry groups, have said procedures to weed out bad vendors are sufficient, and that the rule would have made contracting officers' jobs more difficult while barring vendors with minor legal disputes with the government from winning work.

During the time the rule was suspended, the FAR Council reassessed the changes made by the rule.

According to the Dec. 27 Federal Register, "it was not clear to the FAR Council that there was a justification for including the added categories of covered laws in the rule and ... that the rule provided contracting officers with sufficient guidelines to prevent arbitrary or otherwise abusive implementation, or that the final rule was justified from a cost-benefit perspective."