Federal Contracting: Don’t Pay to Play?

The term “reform” is often used in the political realm to describe a systemic change to eradicate corruption, waste, or some other vice. The President is expected to sign an executive order to reform the federal contracting process. Under the executive order, those who wish to sell goods or services to the federal government must list their political donations as a condition to bidding. The executive order would also extend to the donations of certain corporate officers and executives.

Not everyone is excited about the executive order. In her article in last week’s Wall Street Journal, Kimberly A. Strassel labeled the proposed executive order as “not-pay to play,” arguing that companies would face losing out on federal work for donating to the wrong party.

The Obama Administration argues that the executive order would allow taxpayers to see how federal money is spent. The Administration faces several hurdles in making this argument. First, money earned by a contractor and paid by the government under a federal contract is no longer taxpayer money. Second, a report of a company’s or person’s past political contributions does not necessarily indicate how “taxpayer money” may be spent if the bidder is awarded the contract. Third, even recipients of federal grant money are not required to report on their political contributions.

If the President signs off on the reporting requirements, we can expect hardcore politics to spill over into the world of federal procurement. Republicans would probably retaliate in some form or fashion, and the negative consequences of a political dogfight would endure beyond the next election cycle.

About Gregory L. Shelton

Gregory L. Shelton is licensed to practice in North Carolina, South Carolina, and Florida. He is a South Carolina circuit court mediator and North Carolina superior court mediator. Greg is the Managing Editor of the North Carolina Construction Law Deskbook, the definitive treatise on construction law in the state. He is also Florida board certified as a construction law specialist. He practices at Horack, Talley, Pharr & Lowndes, P.A. Phone: (704) 377-2500 Fax: (704) 716-0905 Email: GShelton@horacktalley.com.
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