Background

Several presidential administrations and members of Congress have attempted to implement blacklisting policies that would condition federal contract eligibility on alleged violations of labor laws. These efforts have failed for good reason: They threaten contractor due process rights, introduce excessive subjectivity and layer unnecessary bureaucracy and cost onto the federal acquisition process.

Federal labor laws, such as the Fair Labor Standards Act, Davis-Bacon Act and regulations surrounding overtime pay, independent contracting and joint employment are complex and frequently revised. These evolving rules create compliance challenges, particularly for small businesses, which often lack the resources to navigate ever-changing regulations.

By implementing flawed blacklisting proposals, allegations could jeopardize a company’s ability to compete for federal contracts regardless of merit. Contractors could also face substantial penalties for failing to disclose these alleged violations, even before any official finding of wrongdoing.

In a time where there is a lack of small business participation in federal contracting, blacklisting policies further discourage small businesses from pursuing federal contracts; threaten the livelihood of millions of Americans employed by federal contractors; and expose taxpayers and businesses to increased costs and risk.

Desired Outcome

ABC supports efforts to ensure compliance with labor laws and a level playing field for federal contractors; however, flawed blacklisting proposals will override current, proven compliance, suspension and debarment processes, create dangerous incentives for initiating baseless allegations against contractors and disincentivize small businesses from bidding on federal contracts.