Proposed 'High Road' Contracting Rules Would Deny Contractors Due Process from Arbitrary Decisions and False Accusations before Being Banned from All Federal Projects
The Associated General Contractors of America cautioned the Obama Administration to reject calls to impose new contracting rules that would allow for blacklisting of companies based on arbitrary reasons, false accusations and unproven anonymous complaints. The proposed changes, referred to as 'High Road' contracting rules, also have the potential to delay countless federal construction projects by adding new levels of time-consuming and costly bureaucratic reviews.
"Under these proposed rules, it could take little more than an anonymous call to deny a contractor the opportunity to compete for federal contracts" said Stephen E. Sandherr, the association's chief executive officer. "With privately funded construction activity continuing to decline, these rules will put many small contractors on the high road to ruin."
Sandherr noted that a report detailing the draft 'High Road' contracting rules being circulated ignores existing due process procedures designed to allow contractors engaged in illegal and inappropriate activities to be banned from federal work. In its place, the draft rules encourage federal officials to refuse contracts to firms based on an arbitrary and unproven scoring system, or based on the mere allegation of labor, tax, environmental and other violations.
With construction activity down by almost $200 billion since 2006 and construction unemployment at 24.9 percent, Sandherr warned that the proposed changes would devastate the hard hit industry. In particular, he said the rule's blacklisting provisions would discourage firms from performing federal work despite significant declines in privately-funded construction activity. "Systemic blacklisting from federal work will have a serious and chilling effect on the industry," Sandherr added.
Not only would the new rules hurt construction firms, they aren't necessary, the trade association head said. Sandherr noted that construction workers earn wages that are 12.5 percent higher than comparable workers. He added that, thanks to Davis-Bacon Act rules, construction workers on federal projects make 22 percent more than the average construction worker.
Sandherr said that the draft rules appear to be based on dated and incorrect assumptions about federal contracting. He noted that much of the report outlining the draft rules appears based on claims made in a 27-year old U.S. Department of Housing and Urban Development report, an agency that does very little direct federal contracting.
"Many of the claims contained in this report paint contractors and federal procurement in a sweeping, out-of-date and uncorroborated light," Sandherr said. "The bottom line is the claims in this report fail to address the realities of federal contracting."
###