Executive Order Directs Use of Federal Procurement and Regulations to Promote Competition 

The sweeping executive order President Biden signed on Friday has several provisions for using federal procurement and regulations to promote competition in the U.S. economy.

“Today’s historic executive order established a whole-of-government effort to promote competition in the American economy,” said a fact-sheet from the White House. “The order includes 72 initiatives by more than a dozen federal agencies to promptly tackle some of the most pressing competition problems across our economy. Once implemented, these initiatives will result in concrete improvements to people’s lives.” 

In order to “address overconcentration, monopolization, and unfair competition in the American economy,” federal agencies should adopt “pro‑competitive regulations and approaches to procurement and spending” and rescind “regulations that create unnecessary barriers to entry that stifle competition,” said the executive order. 

Specifically, the order says agency heads should look at the influence of their regulations, particularly licensing ones, on “concentration and competition” as well as examine how procurement or other spending methods can improve competitiveness for small businesses and businesses with fair labor practices.

The order points out that under current law federal agencies “can influence the conditions of competition through their exercise of regulatory authority or through the procurement process.” 

It says in no more than 180 days after the order was signed, the Defense secretary must submit to the chair of the newly established White House Competition Council a report on the state of competition in the defense industrial base, noting where lack of competition causes concern and any suggestions for improving the solicitation process. 

Also, within 180 days the Defense secretary must submit to the chair a plan on how to avoid including terms in procurement agreements that make it difficult for the department or servicemembers to restore their own equipment. 

The new competition council will be led by the assistant to the president for economic policy and the director of the National Economic Council, who will serve as the chair. Other members will include the Treasury, Defense, Agriculture, Commerce, Labor, Health and Human Services, and Transportation secretaries; attorney general; and Office of Information and Regulatory Affairs administrator. 

Another provision directs the OIRA administrator to use the recommendations it developed on “modernizing and improving” review of regulations, as required by a January 20 memo from the president, to help carry out the order. Specifically, there should be “consideration of whether the effects on competition and the potential for creation of barriers to entry should be included in regulatory impact analyses.”

There are also distinct regulatory and policy considerations for the Agriculture, Treasury, and Health and Human Services departments; Federal Trade Commission; and Federal Communications Commission. 

For example, the executive order directs the Agriculture Department to strengthen its regulations on unfair, discriminatory and/or deceptive practices or preferences for farmers and their products. 

Additionally, there are considerations for oversight in the executive order. 

“Congress frequently has created overlapping agency jurisdiction in the policing of anticompetitive conduct and the oversight of mergers,” said the order. “It is the policy of my administration that, when agencies have overlapping jurisdiction, they should endeavor to cooperate fully in the exercise of their oversight authority, to benefit from the respective expertise of the agencies and to improve government efficiency.”