Republicans push for SBA position on contractor pay policy

Senate Republicans fight a policy that would give preference in awarding contracts to businesses that offer better-than-average pay and benefits.

Republican senators continued today to urge Obama administration officials to stop a possible procurement rule that would give an advantage in contract competitions to contractors that pay employees better wages and offer better benefits.

“The policy, ironically known as ‘High Road’ contracting, could potentially result in an otherwise qualified business being eliminated from consideration for a contract award,” according to the letter sent by 29 senators to Karen Mills, administrator of the Small Business Administration.

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They wrote that if the policy were in place, a company could have the lowest prices and best technical solutions, while complying with labor laws, and still not win a contract.

The senators asked Mills to provide her stance on the High Road contracting policy by Sept. 30. An SBA spokesman said today that Mills has received the letter but has not yet responded to the senators.

Moira Mack, spokeswoman at the Office of Management and Budget, said today that officials have made no decisions regarding the High Road contracting preference, and any discussion about the policy's timing or details is premature.

The High Road preference would instruct acquisition officials to give preference to businesses with labor practices that go above and beyond those required by federal labor laws, such as paying more than minimally required for certain jobs. When considering businesses' bids, contracting officers would need to weigh the wage factor with standard factors, such as cost, past performance and the contractor’s ability to do the work.

The policy would reportedly change how officials score businesses for federal contracts. In their letter, the senators said the policy would add a subjective labor score that could introduce inappropriate political considerations into the federal contracting process.

In the letter, the senators highlighted the problems that small businesses would face because of the policy.

“At a time when our economy is suffering, our small businesses are struggling and we are faced with escalating deficits and debt, we are stunned that the administration would even contemplate erecting artificial barriers to full-and-open competition for government contracts,” they wrote.

This letter isn't the first from Republican senators. Rumors about the High Road contracting policy first surfaced last year, and the Obama administration has not announced details. In February, five senators wrote to Peter Orszag, former OMB director, to inquire about the policy.

In addition, on Sept. 16, Sen. Susan Collins (R-Maine), ranking member of the Homeland Security and Governmental Affairs Committee and one of the signers of both letters, questioned Jacob Lew, nominee for the OMB director job, about the High Road policy. At his confirmation hearing, she pressed him to commit to stopping the policy. However, he avoided making a commitment because he knew too little about the High Road policy, he said.

Collins, who worked as a staff employee in the Senate before she was elected, helped draft the Competition in Contracting Act. She told Lew that the High Road policy would be contrary to the competition law. She also pointed out the Congressional Research Service has said the High Road policy would require legislation. It could not be instituted simply by executive order of the president, she said.