Trump’s first anti-regulation agenda wins favor with federal contractors

The Trump administration reported in July it was making significant headway in cutting back on federal regulations that hinder economic growth. In making the announcement, it said federal agencies have withdrawn or weakened 860 proposed regulations initially put forward at the end of the Obama administration, a move one industry insider called a significant initiative for government contractors.

“It’s slamming the brakes on regulation, and that’s exactly what they’ve tried to do,” said Alan Chvotkin, executive vice president and counsel at the Professional Services Council. “It’s very rare” for OIRA to even talk about a rollback of regulations, Chvotkin told Federal Drive with Tom Temin.

OIRA’s Unified Agenda of Regulatory and Deregulatory Actions, released July 20, said federal agencies expect a 20 percent reduction in completed regulations this year, compared to the Obama administration’s agenda in the fall of 2016. That total also includes 19 regulations worth $100 million or more, a significant reduction for regulations with such a major economic impact.

Chvotkin said he had reviewed primarily acquisitions regulations that impact the government professional and technical services industry his group represents.

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“This initiative covers over 66 departments, agencies and activities. They’ll have to follow the regular process for rulemaking whether under the Administrative Procedures Act of for the Special Rules for Procurement before they can go public with it,” Chvotkin said. “This is an interesting mix and there are over 1,700 different entries here.”

Chvotkin said his review of the changes indicated there were several proposed actions involving procurement, primarily ones that were moved to the “inactive” list, meaning they had essentially been killed. Those included rules withdrawn from agencies like the General Services Administration and the U.S. Agency for International Development, and included Federal Acquisition Regulations that impact areas like conflict of interest, and research and development.

“And not all of them have been bad, from my perspective or industry’s perspective,” said Chvotkin.

For example, Chvotkin cited one GSA proposal to open up the opportunity for vendors on the GSA schedules program to what are called Other Direct Charges.

Alan Chvotkin discusses this story on Federal Drive with Tom Temin

“It looks like they are going to make that one inactive. It would have allowed vendors on the GSA schedule, as part of their schedule offering, to not have to specify all of the other direct charges that would be coming in to support services or minimal travel, things of that sort that are directly linked to providing services but aren’t part of the pricing on the GSA schedule. It’s been an initiative at GSA and industry for several years. GSA came out with a proposed rule a year ago to prevent that. So we’re going to try to reconcile that with the GSA,” he said.

Chvotkin pointed to one proposed regulation that will be made inactive — a conflict of interest issue that has dogged the services industry. It involves an agency seeking help from a contractor in developing a request for proposal, and then allowing the assisting company to bid on the contract.

“The proposed [FAR] change dates back to the tenure of Dan Gordon, when he was the OFPP administrator. He proposed a number of changes to address unequal access to information. It’s one of the three types of conflict of interest that might arise under the regulations. And it was a fairly long reach on his part to modify that. That case had been put on hold by the FAR Council, pending additional guidance. It’s been on hold for over three years and I’m pleased to see that OIRA has moved that [to ‘inactive’] and the FAR Council has taken that off the table,” said Chvotkin.

Chvotkin also mentioned other actions that impact government contractors, including one proposal to create a small business set-aside for research and development contracts that don’t currently exist. “The FAR provides for competition and doesn’t allow set-asides. This proposed rule dating back three or four years ago would have permitted that, and they are moving that into the inactive category, pending some further review and study,” he said.

Another regulation targeted for final action is a law passed last spring to stop implementation of President Barack Obama’s 2014 “Fair Pay and Safe Workplaces” order, which required businesses that receive federal contracts do a better job of adhering to labor and civil rights laws. Many contractors resisted the plan as a burdensome form of “blacklisting” that penalized companies for unproven violations.

“The Congress enacted and the president signed the Nullification and Congressional Review Act bill back in April. We’re now in August and we still have the FAR rule on the books. It’s not being enforced. It’s ineffective, but it’s still there. It ought to be cleaned out. It shows up on this list for final action. And I hope that comes soon,” said Chvotkin.

The Fair Pay order is one of the regulations that falls into a category reserved for those deemed “economically significant,” ones that cost industry more than $100 million. The number of those expensive regulations fell to 58 under the new agenda, half the number there were in the fall of 2016.  Chvotkin applauded the Trump administration for $5.8 billion worth of regulatory burdens to industry those cuts will bring.

“To their credit, they are thinking about that, they are watching that, giving special treatment to those major regulations that have that significant economic impact … those are entitled to some special attention.”

The Trump administration’s regulatory review, in many ways, mirrors that carried out by Cass Sunstein, the OIRA chief in Obama’s first term. But Chvotkin said he likes the openness in which the latest reforms have come.

“This is a very public approach, much more than Cass did under his tenure, but the net result in terms of reducing or draining the swamp is very similar,” Chvotkin said. “What I like about this [one] is the transparency and the speed with which they’ve come out with the changes.”

Still, Chvotkin said he isn’t ready to declare victory. “I think contractors and services like the Professional Services Council need to remain vigilant. We need to be on top of these. And as we’ve done in the past, we’ll continue to be a voice for our membership and the industry to keep OIRA and OMB and agencies informed about our views and what actions they’ve taken — both that we support and those that we oppose.”