Press Releases

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

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Washington, January 30, 2017 | comments

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 statements upon introduction.

Here’s what Chairman Chabot had to say:

“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."  

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.

  • Members of the small business community have been testifying before the House Small Business Committee for the past two years about the harm the blacklisting rule will do to their businesses and employees.
  • Since 2012, there are 100,000 fewer small businesses competing for federal contracts.
  • Throughout the 114th Congress, Small Business Committee Republicans repeatedly sounded the alarm for the Obama administration about the negative consequences of this rule for small businesses through lettershearings and roundtables.  

To read the resolution, click here.

To read a fact sheet, click here.

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