Agencies said to oppose contract 'blacklisting' rules

Two Northern Virginia lawmakers on Monday pressed President Clinton to reconsider a proposed rule that would establish ethics standards for government contractors, highlighting an internal memorandum showing opposition from within the administration.

Reps. Tom Davis, R, and James Moran, D, brought to Clinton's attention a late-September memo from the Defense Acquisition Regulation Council (DARC) expressing concern about the "adverse effects" of the so-called "blacklisting" regulation on contracting officers' ability to meet their requirements.

According to Davis and Moran--in an Oct. 30 letter to Clinton--the memo states that a number of federal departments also hold this view, including the Army, Air Force, Defense Logistics Agency, Defense Contract Management Agency and National Aeronautics Space Administration. The General Services Administration and the Environmental Protection Agency also have expressed their opposition to the proposed rule.

"The statements from the internal DARC memo are deeply troubling and suggest that the administration's proposed regulation could be damaging to the federal procurement process," Davis and Moran said in the letter. They called on Clinton to delay action on the regulation until the completion of an ongoing General Accounting Office audit of its impact.

"This will give Congress and the administration the opportunity to obtain critical data and conduct the necessary oversight to ensure this major shift in the federal procurement process is sound public policy," the lawmakers' letter said.

Davis and Moran introduced an amendment to the funding bill for the Treasury Department and Postal Service seeking to delay implementation until GAO completes its study. The amendment passed the House in July but was stripped from the appropriations bill the following day, according to Davis spokesman David Marin.

The administration may publish the "contractor responsibility" regulation as soon as this week, sources said. Officials with the Office of Federal Procurement Policy could not be reached for comment.

Sen. Tim Hutchinson, R-AR, and Senate Majority Whip Don Nickles, R-OK, earlier this year introduced similar legislation to delay the rule. The bill has the support of 30 to 40 members, but no action has been taken on it, according to Hutchinson spokeswoman Sue Hensley. In September, Hutchinson called the measure "a payoff to the labor unions, based purely on election-year politics, not substance," because Vice President Al Gore suggested it in a 1997 speech to the AFL-CIO.

Clinton vetoed the Treasury-Postal spending bill late Monday, but there is little likelihood of getting the postponement provision back into it at this point, congressional sources said.

The proposed rules aim to keep companies from winning federal contracts if they are found to have poor labor relations or ethically problematic practices. It could have a strong effect on the high-tech industry because the federal government is the largest single purchaser of high-tech products.

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