A Win for Small Business: Legislation Rescinding Harmful “Blacklisting” Rule Advances to President Trump’s Desk

By at 7 March, 2017, 10:43 am

Washington, D.C. – On March 6, the U.S. Senate followed earlier action by the U.S. House to rescind an Obama-era regulation that vastly harms small businesses and their ability to compete for federal government contracts. As noted by Small Business & Entrepreneurship Council (SBE Council) president & CEO Karen Kerrigan, the unfair rule puts small businesses at a competitive disadvantage in the federal procurement space. Less competition for federal contracts undermines taxpayer value with regard to costs and innovative products and services that improve how government functions. SBE Council and its nationwide membership of entrepreneurs and small businesses look forward to President Donald Trump quickly signing the legislation.

“The blacklisting rule is incredibly unjust and amounts to a gross abuse of governmental powers. The federal government needs more small businesses competing for government contracts, not fewer. The blacklisting rule is one of several regulations driving small businesses out of this market. In the end, taxpayers lose. Less competition and small business participation undermines efficiency, innovation, and taxpayer value. Repealing this rule is a big win for small businesses and taxpayers,” said Kerrigan.

The blacklisting regulation was rescinded by both the House and Senate through a Congressional Review Act (CRA) resolution of disapproval, H.J. Res.37.

BACKGROUND: An executive order signed by President Obama in 2014 changed federal procurement procedures by requiring that businesses bidding on federal contracts disclose violations and alleged violations of 14 federal labor laws, as well as similar state mandates, when bidding on a project, and continue such disclosures every six months while under contract. The “blacklisting rule,” finalized in August of 2016, mandates that businesses competing for government contracts report “alleged” violations and can be disbarred because of these allegations, a clear case of denial of due process. Federal courts have currently blocked the rule from being enforced.

Kerrigan added, “Rescinding the blacklisting rule is good news for small business contractors and subcontractors. It is also good news for taxpayers and our system of justice. We hope this move is followed by other reforms to make the federal procurement process more friendly and appealing to small businesses and entrepreneurs. The federal government needs their innovative services and competition they offer to make government work better and provide more value to American taxpayers.”

As noted by the House Small Business Committee, there are 100,000 fewer small businesses competing for federal contracts than there were in 2012.

SBE Council is a nonpartisan, nonprofit advocacy, research and education organization that works to protect small business and promote entrepreneurship. For nearly 25 years, SBE Council has worked to advance initiatives and policies that strengthen the ecosystem for startups and small business growth. To learn more, visit SBE Council’s website: Follow on Twitter: @SBECouncil.



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