5-12-11 "Politicizing Procurement: Would President Obama's Proposal Curb Free Speech and Hurt Small Business?"

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Panel I | Panel II

Chairman Darrell Issa Hearing Preview Statement

May 12, 2011

Thursday’s hearing of the House Committee on Oversight and Government Reform fulfills the committee’s responsibility to safeguard the federal contracting and procurement processes from the exploitation and the undue influence of partisan political concerns. Recently, the Obama administration circulated a proposed Executive Order that would direct federal agencies to require contractors to disclose political expenditures and contributions made within two years of all proposal submissions in an official contracting certification. Moreover, the Executive Order would require contractors to certify their acknowledgment that full disclosure of this information has been made as a precondition for the contract award. Failure to make a full disclosure in the certification process could result in criminal prosecution.

There is now bipartisan alarm on Capitol Hill that the proposed Executive Order runs afoul of the government’s responsibility to keep federal procurement and contracting fair and unbiased. Indeed, Congress must protect U.S. taxpayers from the kinds of corrupt spoils system that could develop if federal contract awards were seemingly tied to partisan political affiliations.

The acquisition and procurement laws are specifically designed to ensure impartiality in the selection of contractors. Competing offers are judged on the merits of their proposals and in the best interests of U.S. taxpayers. If the President’s proposed Executive Order is authorized, political donation information would be readily available to political appointees who are immediately involved in the contracting process. That risk is unacceptable.

Notably absent from the President’s proposed disclosure requirements are any similar terms for unions that work on federal contracts or receive federal grant money. Yet unions are one of the largest political contributors in any American election cycle, and the data reveals that these interest groups overwhelmingly favor Democratic Party candidates.

The Committee will seek information from administration officials about the development of this proposal and hear testimony about its potential effects on the impartiality of federal contracting processes if enacted.

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