Essential Action

FREQUENTLY ASKED QUESTIONS
ABOUT THE ANTI-SCOFFLAW REGULATION

What is the Anti-Scofflaw regulation?

It is a Clinton administration proposal to prevent the federal government from entering into contracts with companies that are chronic violators of labor, environmental, tax, antitrust or employment laws.

What would the regulation do exactly?

The Clinton Administration's "responsible contractor" reforms would clarify existing rules that instruct the federal government only to contract with "responsible contractors." "Responsible contractors" are defined as those who can demonstrate the technical and financial capability and performance record to do a job, and who also evidence the
business integrity and ethics to merit a government contract.

The proposed regulation states that "examples of an unsatisfactory record [of integrity and business ethics] may include persuasive evidence of the prospective contractor's lack of compliance with tax laws, or substantial noncompliance with labor law, employment laws, environmental laws, antitrust laws or consumer protection laws."

The administration's proposal also would specify that a contractor's "capability" to perform a contract includes "the necessary workplace practices addressing matters such as training, worker retention, and legal compliance to assure a skilled, stable and productive workforce."

If the regulation is adopted, then federal government procurement officers will consider a potential contractors' record of respecting the law, and will not allow the government to enter into contracts with chronic lawbreakers.

Why does the regulation matter?

The Anti-Scofflaw regulation would help establish the sound principle that the federal government should not do business with repeat or serious corporate lawbreakers.

And, it would give business an extra incentive to comply with the law, since there would be a real price to pay for repeatedly or seriously transgressing worker rights, health, safety, environmental, tax or antitrust laws. The federal government spends approximately $200 billion a year on procurement, buying goods and services from firms that employ
approximately 20 percent of the U.S. workforce. Government contracts make up a significant revenue stream for many firms, including many of the largest companies in the country.

Does the federal government currently contract with corporate lawbreakers?

Yes. Consider the issues of worker rights and worker safety. A 1995 study by the General Accounting Office (GAO), the congressional research agency, found that 80 federal contractors, receiving more than $23 billion in federal government business in fiscal year 1993, had violated the National Labor Relations Act. Six contractors -- McDonnell Douglas, Westinghouse, Raytheon, United Technologies, AT&T and Fluor -- received almost 90 percent of the $23 billion.

A 1996 GAO study found that 261 federal contractors, receiving more than $38 billion in federal government business in fiscal year 1994, received penalties of at least $15,000 for violating Occupational Safety and Health Act regulations. The biggest of these contractors included General Electric, Lockheed Martin, Westinghouse, United Technologies, General
Motors, Boeing and Textron.

Is anyone opposing the regulation?

The U.S. Chamber of Commerce along with an alphabet-soup full of business trade associations have organized the National Alliance Against Blacklisting to block the proposal. Big Business is revving up arguments about how the regulations would bestow on procurement officers the power to act arbitrarily, and how corporations could be unfairly penalized for failing to comply with confusing and technical federal rules.

Do the Big Business arguments have merit?

No. The Anti-Scofflaw regulation would only apply to companies with a record of "substantial noncompliance" with labor, employment, environmental, antitrust or consumer protection laws. The supplementary information in the regulation proposal explains that procurement officials would generally base their "adverse responsibility determinations" on
final adjudication by a court or formal administrative body. (In some circumstances, the official may look to persuasive evidence of substantial noncompliance with the law, other than final adjudications.) The real danger is not that companies will unfairly be found irresponsible, but that many irresponsible companies may continue to receive government contracts.

Does the Anti-Scofflaw regulation contain provisions besides the responsible contractor criteria?

Yes. The regulation would also end the practice by which the federal government reimburses contractors for conducting anti-union campaigns. And it would end the practice by which the federal government reimburses contractors for legal defense costs in cases where a contractor has violated the law.

What can I do to support the Anti-Scofflaw regulation?

The General Services Administration is now accepting written comments on the Anti-Scofflaw regulation. Citizen comments will encourage the Clinton administration to resist pressure from Big Business, and to adopt the proposal.

Written comments should be sent by regular mail to:

General Services Administration
FAR Secretariat (MVR)
1800 F Street, NW, Room 4035 ATTN: Laurie Duarte
Washington, D.C. 20045

Or, you can send comments by e-mail to [email protected].

Be sure to mention in all written comments that you are commenting in reference to FAR case 99-010.

Our Anti-Scofflaw main page enables you to E-mail comments directly to the agency. We also have suggestions for what to include in your comments.

It is also important that citizens contact their Members of Congress and express their support for the Anti-Scofflaw regulation. Big Business is likely to go to Congress in an effort to block the proposal's implementation.

What if I have more questions?

Contact Essential Action's co-director, Robert Weissman, at [email protected].