House votes to repeal Obama ‘blacklisting’ rule

Congressional Republicans moved a step closer Thursday to repealing an Obama administration regulation that industry opponents claim blacklists companies from procuring federal contracts. 

The House voted 236-187 for a resolution under the Congressional Review Act that would block a rule that requires companies to report any labor law violation or alleged violation they’ve had in the last three years when bidding on federal contracts over $500,000. 

The resolution now heads to the Senate, where it is expected to pass. CRA resolutions cannot be filibustered.

Rep. Tom Cole (R-Okla.) says the rule is duplicative and unnecessary because the federal government already has a suspension and disbarment process in place.

“Prior to awarding a contract, each agencies’ contracting office and a newly appointed compliance adviser will be required to review both violations and alleged violations to determine whether an employer should be awarded a federal contract,” he said. “Even the courts have agreed this is overreach.”

A Texas District Court judge blocked the rule from taking effect in October after Associated Builders and Contractors requested a temporary stay while it challenged the rule in court.

In a statement following Thursday’s vote, the group thanked lawmakers for taking action to protect contractors and taxpayers. 

“As the district court ruled in its preliminary injunction, treating non-adjudicated claims the same as actual wrongdoing denies federal contractors their due process rights,” said Ben Brubeck, the group’s vice president of regulatory, labor and state affairs. 

The contractors group argues the rule, a byproduct of the Obama administration’s 2014 Fair Pay and Safe Workplaces Executive Order, violates the constitutional rights of contractors.

But Rep. Elijah Cummings (D-Md.) argued that the rule is needed to ensure contractors are paying their workers fair wages, maintaining safe work sites and following medical and family leave laws. 

Unfortunately, he said, there are a few bad actors who consistently violate the laws but continue to win contracts. 

“Americans’ tax dollars should not go to contractors who persistently and willfully violate such laws,” he said. “It also puts contractors who do follow the law at an unfair advantage because they willingly bear the cost of compliance to provide safe and fair workplaces.” 

But Rep. Virginian Foxx (R-N.C.) argued she’s standing up for workers, taxpayers and small businesses in leading efforts to repeal the rule.

“The Obama blacklisting rule empowers government agencies to deny employers federal contracts for alleged violations of various federal labor laws and various state laws,” she said.

“That’s right, under this rule bureaucrats can determine employers are guilty until proven innocent and then deny them the ability to do business with the federal government.”

The rule, Foxx said, would have chilling effects on the due process rights of federal contractors.  

The resolution not only repeals the rule, but stops the Federal Acquisition Regulatory Council from re-issuing the rule or one similar in the future.

– Updated at 4:30 p.m.