Senators blast effort to delay contractor ethics rules

Three senators have asked the Bush administration to stop an effort to suspend a controversial rule that sets ethics standards for government contractors. In a Feb. 20 letter to Office of Management and Budget Director Mitch Daniels, Sens. Joe Lieberman, D-Conn., ranking member on the Senate Governmental Affairs Committee, Richard Durbin, D-Ill. and Edward Kennedy, D-Mass, branded the administration's attempt to delay the rule as "likely unlawful." The senators based their charge on a legal memorandum prepared by the non-partisan Congressional Research Service at Lieberman's request. The rule took effect on Jan. 19. On Jan. 31, the Civilian Agency Acquisition Council issued a memorandum allowing agencies to put the rule on hold for six months. Since then, several agencies, including the General Services Administration, Interior Department and NASA, have moved to postpone implementation of the rule. "We are particularly troubled by a coordinated effort by several departments and agencies to exempt themselves for six months from their contractor responsibility obligations without the thoughtful consideration required by law," wrote the senators in their letter to Daniels. OMB did not return phone calls seeking comment on the senators' request. The legal memorandum, prepared by Congressional Research Service analyst Morton Rosenberg, found that the acquisition council's action was legally dubious on several fronts. Rosenberg's analysis centers on the question of whether the acquisition council correctly interpreted Section 705 of the Administrative Procedure Act, which allows an agency to postpone a rule pending judicial review. "In particular, substantial legal doubts may be raised with respect to whether [the acquisition council] made the proper showing of cause required to support an administrative stay under Section 705," the memo concluded. But experts pointed out that the acquisition council invoked a clause of the Federal Acquisition Regulation and not Section 705 in its guidance to agencies. Citing FAR Section 1.4, the acquisition council allowed agencies to gain an exemption from the rule under a "class deviation," which enables individual agencies to exempt themselves from any new regulation. "I think the Congressional Research Service memo lays out a good case against a strategy that the agencies have not taken," said David Marin, a spokesman for Rep. Tom Davis, R-Va., chairman of the House Government Reform Subcommittee on Technology and Procurement Policy. Davis proposed a six-month stay on the rule in December and has repeatedly called for its repeal. "The memo strikes me as addressing an issue of rulemaking, and class deviations are not subject to the rulemaking process," said David Drabkin, a member of the Federal Acquisition Regulation Council, which oversees the acquisition council. The memo, in effect, presents a legal case against a move that the FAR Council has yet to make: using Section 705 to impose a governmentwide, six-month moratorium on the blacklisting rule. But the FAR Council and OMB can avoid possible legal scrutiny by suspending the rule through the formal rulemaking process, a point the memo admits. OMB plans to issue a draft rule revoking the regulation within the next few days, according to Marin. The senators criticized the Bush administration for using the "class deviation" clause to postpone the rule without public comment. "Legalities aside, it is unfair for the administration to delay the implementation date for six months without notice or any consideration of the views of the public," the senators wrote.