Clinton signs privatization bill

Clinton signs privatization bill

On Monday, President Clinton signed the Federal Activities Inventory Reform (FAIR) Act of 1998, which requires federal agencies to review their activities and define them as either inherently governmental or potentially subject to privatization. The bill had passed the Senate in August and the House earlier this month.

Under the act, federal agencies must inventory their activities annually and open them up to public comment by printing their lists in the Federal Register. Interested parties-including businesses who would like to push for such services to be opened for bidding and unions seeking to keep the jobs in-house-will then have 30 days to challenge the agency's characterization. At that point, the agency will have 28 days to respond with a decision and explanation. Functions labeled non-governmental would have to be put up for competitive bidding "by a reasonable time."

"Because of the FAIR Act, small business will now know how pervasively the federal government is involved in performing commercial activities," said Matthew Page, director of legislative affairs for the Small Business Legislative Council, an umbrella group of 90 trade associations that had been one of the lead lobbying groups in favor of the act. "The next step is working to make sure those commercial activities are made available to the private sector."

The measure Clinton signed was a watered-down version of legislation sought since early 1997 by a coalition of business groups. Most, though not all, of the bill's initial critics-including some unions and eventually the Clinton Administration itself-agreed to the version signed by Clinton because it seemed to go only a little further than existing regulations.

The coalition supporting the bill ranged from the U.S. Chamber of Commerce, Corning Inc. and KPMG Peat Marwick Inc. to the Association of RV Parks and Campgrounds and the Helicopter Association International.