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AGC: Proposed Order on Disclosure of Political Spending Could Harm Contractors

Mon May 16, 2011 - National Edition
Construction Equipment Guide

A draft executive order that would force government contractors to disclose all political contributions would make it too easy for political appointees to punish contractors for their political views or to coerce contributions from firms, officials of the Associated General Contractors of America warned May 12 in testimony submitted to Congress.

"The process outlined in the draft executive order would make it much easier for government officials to use the political activities of government contractors as a factor when awarding contracts," Stephen E. Sandherr, the association’s chief executive officer noted in testimony submitted to a hearing held jointly between the House Committee on Oversight and Government Reform and the Committee on Small Business. "This order actually introduces, instead of excludes, politics from government contracting."

Sandherr, who raised similar concerns in a letter he sent directly to President Obama, said that the proposed executive order, titled "Disclosure of Political Spending by Government Contractors," is unnecessary. He noted that there is no evidence to indicate that political contributions are influencing the award of federal contracts. And he added that the contractors are already required to disclose the vast majority of political spending.

While the ostensible purpose of the executive order is to ensure contracting decisions are based on merit and best value, Sandherr cautioned that it would actually "create the mechanism for enforcing a political litmus test on government contractors rather than prohibiting the consideration of political contributions." He warned that the rule, once finalized, would actually undermine the credibility of the current federal procurement process.

Sandherr also questioned the political motives of the order, noting it does not apply to many special interest groups that currently seek federal funding, grants or favorable regulatory and administrative rulings. The construction official noted, for example, that federal employee unions that negotiate contracts for their members worth many times the value of most government contracts would not be required to disclose their political spending.

"The fact the president seems unwilling to hold unions to the same standard as employers makes the intent of this draft order, at best, questionable," Sandherr said. "This rule makes it look like the administration is more interested in punishing political opponents and propping up political allies than protecting public taxpayers."

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