Tech firms rally against federal procurement proposal

The American Electronics Association, the Information Technology Association of America and the Computing Technology Industry Association have joined a broad coalition of companies and business groups to lobby Congress and the White House in opposition of an administration-proposed rule that they say could make obtaining federal contracts more difficult.

The prospective rule, issued July 9 under the direction of Vice President Al Gore's office, would require government contracting officers to review a firm's compliance with labor, employment, tax, environmental and antitrust laws before awarding a federal contract. If there is "persuasive evidence of substantial noncompliance with a law or regulation," a company could be barred from being considered for a federal contract. There is a public comment period on the rule that ends on Nov. 8.

High-tech companies, whose largest single purchaser is the federal government, say the proposed law is too vague and fear that competitors could politicize the procurement process. In addition, they say the rule would add enormous responsibility and power to a federal procurement officer who may not be equipped to determine whether there is "persuasive" or "substantial" evidence of labor violations.

For example, Microsoft is embroiled in an antitrust suit with the federal government, should they then be barred from government contracts? asks Nancy Saucier, manager of domestic policy for the AEA. Or because employee turnover is traditionally very high at high-tech companies, are they going to be penalized for not doing enough to retain employees?

"A third party could put social pressure or environmental pressure on a procurement officer and subject the whole process to politicization," said Harold Coxson, executive director of the National Alliance Against Blacklisting, the name of the broad business coalition that is representing 1,000 federal contractors and business groups, like the U.S. Chamber of Commerce, opposing the rule. Coxson said the group uses the word "blacklisting" because many companies are afraid to stand up and oppose the rule over concern that they will be prohibited from being considered in the future for a federal contract.

The issuance of the proposed rule follows a 1997 speech Gore made to the AFL-CIO promising that the administration would seek to bar companies with unfavorable labor records from getting government contracts.

The technology associations have joined forces with the Professional Services Council, a trade association that has been lobbying against the new contracting rule even before it was officially proposed.

White House officials could not be reached for comment.