House, Senate Leaders Move to Protect Small Businesses, Promote National Security

WASHINGTON, D.C. – House and Senate leaders with jurisdiction over workforce protections and federal contracting today introduced a joint resolution of disapproval that would block implementation of the Obama administration’s flawed, redundant, and burdensome “blacklisting” rule through the Congressional Review Act. The rule would make a system designed to protect workers less efficient, undermine our nation’s military readiness, and limit the ability of small businesses to compete for federal contracts.

Committee leaders released the following statements upon introduction:

“Workers deserve strong protections, and employers who do business with the federal government must be held to a high standard. But this blacklisting rule doesn’t make sense,” said Rep. Virginia Foxx (R-NC), chairwoman of the House Committee on Education and the Workforce. “Federal agencies already have the tools they need to hold contractors accountable. Adding an unnecessary layer of red tape would only hurt workers and small businesses, increase costs for taxpayers, and threaten the resources our men and women in uniform rely on. We look forward to working with the new administration to ensure responsible regulatory policies are in place, worker protections are enforced, and taxpayer dollars are well-spent.”

"Because this rule lacks basic due process, innocent firms could potentially be blackmailed by using the threat of being blacklisted,” said Sen. Ron Johnson (R-WI), chairman of the Senate Committee on Homeland Security and Governmental Affairs. “As a result, this grossly unfair rule must be repealed."

“Unneeded regulations have no clear benefit. Placing regulatory burdens on the backs of federal contractors only increases costs and complicates an already complicated system,” said Rep. Jason Chaffetz (R-UT), chairman of the House Committee on Oversight and Government Reform. “Regulations like the 'blacklist' rule are an easy way to discourage innovation and stifle competition in the federal marketplace. Given the incredibly expensive and particularly burdensome impact of this rule, Congress must swiftly take action.”

“Today’s resolution to overturn the harmful Obama Administration ‘blacklisting’ regulation is good news for our nation’s federal contractors and subcontractors, who could be blocked from receiving a federal contract for an alleged labor violation before any wrongdoing has been proven,” said Sen. Lamar Alexander (R-TN), chairman of the Senate Committee on Health, Education, Labor, and Pensions. “I look forward to voting on this resolution and sending it to President Trump’s desk for his signature to prevent politically motivated bias and favoritism, preserving a level playing field for federal contractors.”

“When the federal government contracts with small businesses, the taxpayer saves and communities across the country benefit,” said Rep. Steve Chabot (R-OH), chairman of the House Committee on Small Business. “That’s why the ‘blacklisting’ rule hurts everyone, especially our small business job creators who have played by the rules. At the Small Business Committee, we’ve heard specific, first-hand accounts of how this rule has killed jobs. It’s for the sake of these small contractors and their employees that I’m dedicated to working with my colleagues across our jurisdictions to undo the damage of the blacklisting rule. 

“The ‘blacklisting rule’ is an additional layer of red tape that hinders the ability of small and midsize companies to compete for federal contracts, adversely impacts timely and efficient procurement, and threatens the well-being of our troops,” said Rep. Paul Mitchell (R-MI). “This is another important step in limiting the power of unelected Washington bureaucrats.”

BACKGROUND: In 2014, former President Obama signed Executive Order 13673, adding a new layer of bureaucracy onto a federal procurement system already plagued by delays and inefficiencies. The executive order directed federal agencies to change the procurement regulations. The resulting “blacklisting” rule requires employers bidding on federal contracts to disclose violations and alleged violations of 14 different federal labor laws and similar state labor laws. Employers would also be required to determine a subcontractors’ or suppliers’ compliance with complex labor laws. The rule, which is currently blocked by a preliminary injunction, is fatally flawed:

• The blacklisting rule violates due process and holds federal agencies to a different, lesser standard. The executive order empowers agencies to deny contracts for “alleged” violations of various federal labor laws, setting a startling precedent that employers are guilty until proven innocent.

• The blacklisting rule threatens the vital resources the Armed Forces need to defend the homeland and keep Americans safe. According to the Professional Services Council, the executive order will “slow the [Department of Defense] acquisition process and harm the Department’s ability to meet its mission.”

• The best way to ensure fair pay and safe workplaces is to enforce existing suspension and debarment rules. In 2015, federal agencies issued 918 suspensions and 1,873 debarments to employers bidding on federal contracts — including 244 suspensions and 859 debarment actions by the Department of Defense.

Under the Congressional Review Act, Congress may pass a resolution of disapproval to prevent, with the full force of the law, a federal agency from implementing a rule or issuing a substantially similar rule without congressional authorization. The resolution introduced by House and Senate leaders would block the blacklisting rule from taking effect and prevent future administrations from promulgating a similar rule.

To read the resolution, click here.

To read a fact sheet, click here.

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