News

AGC Warns Proposed Order on Political Spending Disclosure Makes Punishing Contractors Too Easy

On May 12, 2011, AGC submitted testimony for a hearing held jointly between the House Committee on Oversight and Government Reform and the House Committee on Small Business entitled, “Politicizing Procurement: Would President Obama’s Proposal Curb Free Speech and Hurt Small Business?”  The hearing examined the proposed Obama Executive Order that mandates the disclosure of political donations by government contractors as a prerequisite to receiving a government contract, and evaluated its impact and consequences upon the federal acquisition system. Specifically, the Committees are concerned that this proposed EO will inject politics into the procurement process, violated political free speech rights, and usurp the legislative power of Congress. AGC's statement provided details on how the EO would negatively affect the construction industry, saying that forcing government contractors to disclose all political contributions would make it too easy for political appointees to punish contracts for their political views or to coerce contributions from firms. While the alleged purpose of the EO is to ensure contracting decisions are based on merit and best value, AGC 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.  AGC also warned that the rule, once finalized, would actually undermine the credibility of the current federal procurement process. AGC also raised similar concerns in a letter sent by CEO Stephen Sandherr directly to President Obama. That letter stated that the proposed EO, titled “Disclosure of Political Spending by Government Contractors,” is unnecessary, noting that there is no evidence to indicate that political contributions are influencing the award of federal contractors.  AGC also pointed on in the testimony and the letter to the White House that contractors are already required to disclose the vast majority of political spending and that there is already a publicly available web-based searchable database showing all political contributions. AGC is concerned about the political motives of the EO, noting it does not apply to many special interest groups that currently seek federal funding, grants or favorable regulatory and administrative rulings, but exempts 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. AGC also questioned how the proposed EO will limited free speech protections offered by the First Amendment. In addition, AGC signed on to a broad business coalition letter to President Obama opposing the proposed executive order. Read AGC’s press release here.  The news was covered by the Twin Falls Times News, ENR and Construction Equipment Guide.
For more information, please contact Marco Giamberardino at (703) 837-5325 or giamberm@agc.org.