Pending contracting legislation raises concerns

Washington, D.C. -- Bush administration officials along with representatives of federal contractors raised concerns Wednesday over what they characterized as potential unintended consequences of contracting reform before legislators.

Several witnesses at a hearing of the House Oversight and Government Reform Subcommittee on Government Management, Organization and Procurement said that while the goal of transparency in the procurement process is commendable, some of the bills currently before the subcommittee could have adverse effects on contracting efforts.

For example, witnesses said, the Government Contractor Accountability Act (H.R. 3928), sponsored by Rep. Christopher Murphy, D-Conn., doesn't take into account differences in the practices of publicly traded companies and private firms.

The bill would require a contractor to disclose the names and salaries of its most highly compensated officers if more than 80 percent of the company's annual revenue comes from federal contracts and it holds contracts worth more than $5 million in any fiscal year. While the compensation of heads of publicly held companies is now widely available, private companies are not obligated to fully disclose that information.

Paul A. Denett, administrator of the Office of Federal Procurement Policy at the Office of Management and Budget, said federal contracting officers already have access to compensation information under existing regulations and making the information available to the public could have a "chilling effect" on companies' participation in competing for federal contracts -- especially small businesses.

"There are a lot of small businesses that would be disturbed about jumping into the government space if this legislation was enacted," Denett said. "The presidents of those private companies don't want their employees to know what they're making." He said members of Congress should consider only making the bill's provisions applicable to companies with more than $25 million in contracts in a given fiscal year. That, Denett said, "would get at some of the much larger [companies] that in conjecture are causing you the most consternation."

Murphy said he would consider such a change, because he wanted to target the legislation at large private firms that operate much like public companies.

"The idea that small businesses would be lumped in with much larger corporations who are obviously the targets of these efforts towards transparency is indicative of a flawed and imbalanced process," said Simon Brody, Director of Communications of NAGC.

"More efforts need to be made to level the playing field rather than creating unnecessary difficulties for smaller firms already having difficulties being able to compete."

About NAGC:
The National Association of Government Contractors (NAGC) is the home of America's procurement professionals. Thousands of business owners and executives working with government agencies, universities and private corporations trust NAGC as a professional resource for their procurement needs.