Critics Challenge Clinton's Crackdown on Crooked Contractors

Article excerpt

The Clinton administration will issue new rules today to prevent companies that have violated labor, tax or other federal laws from winning government contracts. The U.S. Chamber of Commerce plans to file a lawsuit to try to stop the rules from taking effect as planned on Jan. 19, the day before George W. Bush's inauguration.

Labor unions, however, said the rules elevate ethics to a primary concern in awarding contracts.

The rules, called the "blacklisting" rule by opponents, will cover the $200-billion-a-year market for government contracts.

The Employment Policy Foundation, a business-backed public policy foundation, said 23 of the top 25 government contractors, among them Boeing Co., Raytheon Co., General Electric Co., and Halliburton Co., could lose federal work under the new rule.

When the Office of Management and Budget (OMB) announced the final rules yesterday, the Chamber of Commerce said it would join Fortune 500 companies that belong to the Business Roundtable in a lawsuit against the government. They say the rules require contractors to monitor their own compliance with too many laws and give government agencies too much discretion in eliminating the eligibility of companies for contracts.

"Any employer can get hung up on a technical violation of the law," said Randy Johnson, vice president of labor and employee benefits policy for the U.S. Chamber of Commerce. "The federal government itself wouldn't qualify for a contract under these rules."

Business groups say it will be difficult for agencies to apply the law fairly. Each government agency has contracting officers who decide which companies win contracts.

"The main problem is businesses have no way of knowing how a contracting officer is going to apply these regulations," Mr. Johnson said. "The contracting officer has total discretion."

Bethesda-based defense contractor Lockheed Martin Corp. is taking a wait-and-see attitude. "I guess we'd have to take a look at it first. We will continue to operate within the laws and regulations of the U.S. government," spokesman Hugh Burns said.

He said any possibility Lockheed Martin or other government contractors would lose their contracts was "speculation at this point."

Boeing officials refused to comment until they have reviewed the rules thoroughly.

The rules, which OMB sent for publication in today's edition of the Federal Register, have been criticized by Republicans in Congress. …