White House prepares to unveil ‘High Road’ contracting policy

Gautham Nagesh Contributor
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Multiple sources say the White House could unveil its new ‘High Road’ contracting policy as early as this month in response to the recent spate of media reports. The proposal would leverage federal contracting to raise wages and support unionized companies, a significant shift from the government’s longstanding emphasis on obtaining best value for the taxpayer.

The Daily Caller first reported the White House was considering the proposal in early February. On Monday an administration official confirmed the policy is under consideration but said no final decision has been reached and no formal recommendations have been made to the president.

However, sources say the White House is moving up its timetable by two months in response to recent media reports on the policy and they expect the Obama administration to unveil a proposal in the coming weeks, possibly as early as this month. The administration did not respond to a request to comment.

“It appears that the discussions are very far along and the administration very much wants to bring a High Road option into being on a short horizon,” said Larry Allen, president of the Coalition for Government Procurement. “This is clearly something that they want to do because it’s political payback for the support they got from organized labor during the election.”

With private sector union membership at its lowest levels in decades, the labor movement hoped its strong support of Obama on the campaign trail would translate into substantive action to bolster unions. Instead labor has been dealt a series of setbacks from the stalling of card check to the Senate blocking labor lawyer Craig Becker’s appointment to the NLRB. AFL-CIO president Richard Trumka and other labor leaders pressed the White House to use a recess appointment to seat Becker but the president demurred.

In contrast, tilting the $500 billion federal contracting market to favor unionized companies would be the most significant policy enacted on labor’s behalf since President Obama took office. The policy could also have far-reaching impact on the construction and services industries, both of which currently rely heavily on federal spending.

Last week the Project on Government Oversight, the Center for American Progress and the non-profit OMB Watch sent a letter to President Obama expressing their support for the High Road policy, which they claim will decrease government waste and promote competition among bidders. They also point to law enacted in Maryland that requires contractors to pay a “living wage” that they say increased the average number of bids by 30 percent.

“We urge you to support reforms that, in selecting contractors, give significant weight to companies that provide workers with good wages, affordable health care, paid leave and retirement security,” the letter states.

Republicans and industry groups have slammed the proposal, which would give preference to contractors that pay hourly workers a “living wage” and provide other benefits. Critics contend that the process would heavily favor unionized companies in the federal market. Allen said members of the contracting community view the policy as an attempt to use government contracting to “redistribute wealth across a certain class of working people.”

Since taking office Obama has repeatedly promised to lower the cost and increase the transparency of government contracting. Industry and good government groups contend that the High Road policy would have the opposite effect.

“This is not not government management at all, this is very much a social policy with its own set of drivers,” said Allen, adding that if adopted, the proposal would significantly increase the cost and number of delays in the procurement process.

Allen’s concerns were echoed by Sen. Susan Collins and four other Republican Senators who sent a letter to OMB director Peter Orszag in early February requesting a briefing on the proposal. Allen said the Obama administration is “being very cagey about whether they’re even going to brief the Hill.”

“I think it’s going to be a very bad thing for government contracting and really not a good deal for American taxpayer. [We’re] going to be paying more for the same things than they are now,” Allen said.

The administration has declined repeatedly to speak to the details of the proposal, but last week’s report from Vice President Biden’s Middle Class Task Force is perhaps the clearest picture of the White House’s motivations:

The task force recognizes that contracts should not be awarded to irresponsible sources with unsatisfac­tory records of business ethics, including noncompliance with labor and employment, tax, fraud and consumer protection laws. We also recognize that substandard wages and benefits can have negative impacts on employees’ productivity and stability, which in turn can reduce the quality of performance on federal contracts.

Allen said he doubts the High Road policy can be implemented as an executive order so it will likely be introduced as a proposed rule change to the Federal Acquisition Regulation. That would require a mandatory period for public comment, but Allen is skeptical that the administration will heed the public’s input.

“I think that tells you right there a lot about what you need to know about the whole initiative,” Allen said. “That this is something they’re not going to be looking for a lot of input or comment on really.”