Contractors dodge ACORN scandal for now

In another example of the law of unintended consequences, the ACORN scandal this week threatened to wash over government procurement.

The non-profit group receives federal funds and has made headlines recently for, among other things, giving advice on how to set up prostitution ring. ACORN, which previously was involved in voter registration activities, has been a favorite target of conservative groups.

So in a rush to punish the organization, the House passed a bill designed to strip the group of funding. But the law was written so broadly that it could easily apply to government contractors who have been charged, but not convicted of any wrongdoing.

The Project on Government Oversight quickly jumped on the issue and announced that 43 contractors could be impacted by the law.

Rep. Alan Grayson (D-Fla.) has sept up a Google spreadsheet asking people to send him company names and evidence of other contractors who should stop receiving government funds under the law.

Industry groups such as TechAmerica and the Professional Services Council have begun sounding the alarm about the bill.

“This [legislation] could put a company out of business without regard to actual guilt,” according to a statement by Phil Bond, president of TechAmerica. “All contractors are asking for is simple due process – the opportunity to defend themselves in court against an allegation that could well be false.”

"Lots of folks were making calls the last two days," said Alan Chvotkin, executive vice president and counsel, at PSC.

But the continuing resolution passed Friday by the House has a one-line provision on ACORN that is specific to that group and won't pull contractors into the mix. "The danger has passed," Chvotkin said.

But the pressure to ferret out fraud continues. Agencies have been asked by the Office of Management and Budget to comfirm the status of who is receiving federal funds.

The question is: Is an accusation of wrong-doing enough to yank someone's contract? Chvotkin and others think debating that question should be conducted as part of an open discussion, but jumping behind poorly written legislation isn't the way to do it.