CRS opens door for vendor reporting of political spending

By Federation of American Scientists, detailing the legal and legislative authorities the White House has when it comes to federal contractors.

“As the case law illustrates, presidents have broad authority under the Federal Property and Administrative Services Act of 1949 (FPASA) to impose requirements upon federal contractors,” the report stated. “However, this authority is not unlimited, and particular applications of presidential authority under FPASA have been found to be beyond what Congress contemplated when it granted the president authority to prescribe policies and directives that promote economy and efficiency in federal procurement.”


CRS says there are two issues at hand. The first is requirements of a particular executive order have been found invalid when they conflict with other provisions of law.

But, CRS also says, courts have emphasized that federal contracting is voluntary so if a company doesn’t like the rules, they don’t have to participate.

“In sum, Congress appears to have granted the president wide latitude to issue executive orders on federal procurement,” CRS stated. “Courts seeking to uphold such orders may use the presidential findings in the executive order itself to determine that the requisite nexus exists between an order issued under the authority of the FPASA, or executive branch actions taken pursuant to that order, and the FPASA’s goals of economy and efficiency in procurement.”

The White House floated the draft executive order in April that would require agency contracting departments to mandate vendors disclose certain political contributions and expenditures in the past two years before submitting a bid on a contract.

The proposal would require vendors and their employees to report contributions that total more than $5,000 in any one given year. The draft order also would require all of this data to be published on in a machine readable format.

Congress and industry pushed back quickly against the draft order.

More than 25 senators wrote a letter to President Obama asking him not to make the order final, and the House Oversight and Government Reform Committee held a hearing reviewing the potential rules.

CRS’s report comes as the Senate defense authorization bill for 2012 includes a provision to prohibit the Defense Department from collecting information about political contributions of vendors.

“The president’s proposed policy would give the appearance that federal government contracts are related to political contributions,” said Sen. Susan Collins (R-Maine), one of the co-sponsors of the amendment. “Our amendment would keep politics out of the bid process at the Department of Defense. I will continue to press for legislation that would apply this standard across the agencies. What possible good can come from linking political information to a process which must be grounded solidly and unequivocally on providing the very best value to American taxpayers? It is unfathomable why this administration would consider a move that would inject politics into the process, or create a perception that politics is something to be considered in selecting the winners and losers among businesses vying for federal contracts.”

Along with Collins, Sen. Rob Portman (R-Ohio) sponsored the amendment. Portman said the language helps to guarantee DoD contracting decisions are made based on national defense and not politics.

Collins also introduced a bill, the Keeping Politics out of Federal Contracting Act, which would do the same thing as the DoD authorization bill amendment, but governmentwide.

Industry groups, as expected, came out strongly in favor of the Collins-Portman amendment.

“We must focus on making the government contracting process more open, transparent and efficient,” said Phil Bond, president and CEO of TechAmerica, in a release. “Adding politics to the process would have reversed the progress that has been made in achieving these goals. We urge the full Senate to adopt the legislation with the amendment intact. Additionally, we urge the president to abandon the proposed executive order and call on Congress to pass the ‘Keeping Politics Out of Federal Contracting Act of 2011’ to ensure that the prohibition is applied government-wide and all federal government contracts remain free of political influence.”

The Professional Services Council also applauded the amendment’s passage.

“The question is not whether political contributions should be disclosed, but the linkage of those disclosures to the federal procurement process,” said PSC president and CEO Stan Soloway in a release. “Protecting the integrity of the procurement process is not a partisan issue, as demonstrated by the bipartisan approval of this amendment. The Senate should ensure that this common-sense prohibition is applied governmentwide.”

But even if the amendment becomes law, it doesn’t guarantee it would survive a legal challenge.

CRS found that courts have generally upheld orders issued under FPASA “so long as the requisite nexus exists between the challenged executive branch actions and FPASA’s goals of economy and efficiency in procurement.”

CRS also stated that courts have found that on certain occasions the White House overreaches on its authority, going beyond what Congress intended.

“Some courts and commentators also have suggested that presidents have inherent constitutional authority over procurement,” CRS stated. “A president’s reliance on his constitutional authority, as opposed to the congressional grant of authority under the FPASA, is more likely to raise separation of powers questions. In the event that Congress seeks to enlarge or cabin presidential exercises of authority over federal contractors, Congress could amend FPASA to clarify congressional intent to grant the president broader authority over procurement, or limit presidential authority to more narrow ‘housekeeping’ aspects of procurement.”


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