Vendor ethics rule halted -- for now

Federal agency contracting officers have received guidance recommending they put on hold a new policy that sets strong ground rules for vendor business ethics when making awards. The Civilian Agency Acquisition Council sent a memo to agencies Jan. 31, delaying implementation of the contractor responsibility rule until July 19.

According to the memo from council chairman Al Matera, "the effective date extension will allow the federal government and federal contractors sufficient time to meet the new obligations and responsibilities imposed by the final rule."

The rule, which is an amendment to the Federal Acquisition Regulation, went into effect Jan. 19, just one day before President Bush took office, and contracting officers had already started incorporating it into requests for proposals released after Jan. 20. Matera directed agency contracting officers to amend solicitations already issued that include the rule.

Vendors have long opposed the rule — which requires contracting officers to take into account any lawsuits or complaints filed against a company when considering them for a contract award — calling it the "blacklisting regulation." And the FAR Council, which oversees the CAAC, received letters from industry and Congress requesting an extension beyond July 19, Matera wrote.

At the same time, Bush is considering revoking many mandates issued by the Clinton administration in its final days. There have been requests to review this rule from vendors and members of Congress, including a letter from Rep. Tom Davis (R-Va.), the new chairman of the House Government Reform Committee's Subcommittee on Technology and Procurement Policy, and Bush has included this rule among the others, according to an attorney in the General Services Administration's Office of the General Counsel. Matera's memo wasn't a "tremendous surprise," said Larry Allen, executive director of the Coalition for Government Procurement, one of the organizations that opposes the regulation.

"This underscores that this rule was not something the procurement officers thought was necessary. It was entirely a political move," Allen said. "It will take a formal process to formally expunge the rule, and you can expect the vendors to be completely supportive."