High Road Division

By Robert Brodsky

The Obama administration's often-discussed but yet unannounced High Road contracting policy, which would give additional weight in the source-selection process to labor-friendly companies, is drawing strong reactions from all sides of the acquisition sector.

On Friday, the watchdog groups Project on Government Oversight and OMB Watch, along with the Center for American Progress, a left-leaning think tank, sent a letter to President Obama urging support of the policy.

"When contractors pay very low wages and benefits, taxpayers often end up getting a bad deal," the groups said. "Work quality can suffer and the government bears hidden costs because taxpayers need to provide income assistance and benefits to low income families, such as Medicaid and food stamps. In practice, this amounts to something like a government subsidy for low-road companies, while high-road companies are placed at a competitive disadvantage."

Not surprisingly, contracting organizations have a different take on the proposal. The Professional Services Council said Tuesday that the 1965 Service Contract Act already mandates that contractors pay their employees prevailing wages and benefits for their industry sector and geographic location.

"Workers deserve to be paid a fair wage," said Stan Soloway, PSC's president and chief executive officer. "Under the SCA, it is the government -- not the company -- that dictates the prevailing wages and benefits that must be paid. And the premise of the SCA is that these prevailing wages are, in fact, fair wages," "To the extent that wages might be deemed inadequate or the SCA does not function as intended, the logical redress would be to focus on the Labor Department's management and enforcement of the law and the wage determinations process it requires."