Obama donations proposal would hurt acquisition process, critics say

Expected mandate comes under fire from industry groups and Capitol Hill

President Barack Obama’s attempt to have businesses show whom they support politically has come under fire from industry groups and Capitol Hill.

The primary complaint is that the proposal goes against the grain of a merit-based procurement system.

In a circulating draft executive order, Obama proposes to bring politics into the contracting process by making a company’s contributions to a certain party or candidate a part of each bid proposal from a contractor, said Sen. Susan Collins (R-Maine), ranking member of the Senate Homeland Security and Governmental Affairs Committee, who works on procurement issues.

“It troubles me that the draft executive order could be perceived as making political contributions a factor to be considered in awarding federal contracts,” Collins said.

Related story:

Obama wants contractors to disclose political contributions

White House officials have been circulating the draft through the business community and in Congress that would require political contributions to be included with all bid proposals for a federal contract. (Read the order.) Although the order would leave many details up to the Federal Acquisition Regulatory Council, the administration wants company disclosures to include:

  • All contributions or expenditures to federal candidates, parties or party committees made by the company submitting a bid, its directors, or even any affiliates or subsidiaries it controls.
  • Any contributions made to a third party that intends to use those contributions to make independent expenditures or advertisements.

Companies would have to disclose the information if the total amount of contributions exceeds $5,000 in a year, according to the draft.

The main point is openness, an administration official said April 20. The president wants more transparency in the procurement process.

“Taxpayers deserve to feel confident that federal contracting decisions are based on merit alone and are not influenced by political favoritism,” the official said.

Many officials and experts view it very differently.

In a letter to the president dated April 21, Rep. Sam Graves (R-Mo.), chairman of the House Small Business Committee, wrote that the order would influence the procurement process, especially as most agencies' senior contracting official is a political appointee.

“Is it naive as to assume that no one will ever use this information when evaluating contractors or writing requirements documents?” he wrote. (Read the full letter)

Graves points out that the order says nothing about unions or grantees, which should show where their political contributions are going, because they also work with the government as do contractors.

The order is tied back to the Supreme Court’s 2010 Citizens United v. Federal Election Commission decision that allowed political contributions from corporations. The president was clear in his 2010 State of the Union Address about his disagreement with the court’s decision, saying it “will open the floodgates for special interests — including foreign corporations — to spend without limit in our elections.”

He called on Congress to pass a bill to counter the court’s decision. However, the Democracy is Strengthened by Casting Light on Spending in Elections Act (Disclose) failed to make it to his desk in the last Congress.

And lawmakers are upset that Obama would take this approach to get around them.

The draft order “appears to be an attempt by the administration to circumvent Congress by implementing provisions of the so-called Disclose Act, despite the Senate’s rejection of that legislation in its current form,” Collins said.

In his Fine Print blog, Gary Bass, executive director of OMB Watch, wrote that there’s not chance of the Disclose Act’s passage in this split Congress. “So it is now up to the administration to tackle the problems caused by the corrupting influence of money in politics.”

“The fact of the matter is that disclosure of political contributions, no matter who they come from, is good for democracy,” Bass wrote.

However, Graves said companies, particularly small businesses, will keep from participating in politics or only contribute to the party that’s in power. But that doesn’t advance Obama’s idea of getting all Americans involved in elections, he said.

“Silencing these small businesses robs our nation of an important voice in our political discourse,” Graves wrote.

The business community, too, is upset by the president’s proposal. The Professional Services Council sharply criticized the order, saying it is “force-feeding irrelevant information to government contracting officers.”

“It is based on dubious legality and a complete lack of awareness of the realities of the federal procurement process,” said Stan Soloway, president and CEO of the PSC.

To build a merit-based acquisition process, the political disclosures are unnecessary and gathering that information encourages the idea that contracting officers should use the information in awarding contracts, said Alan Chvotkin, PSC’s executive vice president and counsel.

“That undercuts the premise of the executive order,” he said.

For contracting officers, the order would require more administrative work and audits of contractors’ information to check on its accuracy. But if the accuracy isn’t going to be under such scrutiny, Chvotkin said he questioned why the information is necessary.

Collins said she hoped the order goes no further than a draft.

“Since this is reported to be a draft, I am hopeful cooler heads will prevail and this proposal will not see the light of day,” she said.

However, Chvotkin said presidential orders that make it this far in standard intragovernmental reviews are very likely to continue on to completion.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

Reader Comments

Mon, Apr 25, 2011

How does providing donation information in a proposal bid further transparency? The number of people who evaluate proposals is relatively small. Is there any other required information submitted with a bid that isn't used in the evaluation?

Fri, Apr 22, 2011

Yeah, pretty funny to hear PSC talking about a merit-based system, which contractors haven't wanted. And congress trying to keep the biggest bit of judicial activism ever (after the Supreme Court pulled that case up from a lower court, changed its scope, then pushed it through like the corporate lawyers they are).

Fri, Apr 22, 2011 WOR

Yes, how would business-as-usual be business-as-usual without the graft?

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