Monday, March 15, 2010

Feds May Favor Firms Who Pay More

The White House's Middle-Class Task Force is considering a proposal and potential Executive Order that would give preference to federal contractors who pay their workers more in wages and benefits.  The initiative is being termed as "responsible federal contracting," and would add responsibility criteria as part of award decisions.

This is viewed by many as a labor union driven objective that would restrict competition to union contractors and end up increasing prices. 

According to the Associated Builders and Contractors, "federal contractors would face the possibility of being scored based on compliance with existing labor, wage, benefit, tax, regulatory and environmental laws as well as cost, past performance and their ability to meet stated contract requirements."

Objectively speaking, bidder responsibility criteria can be a good tool for governments to use in awarding contracts.  However, they must be tailored to be objective so that the public is the beneficiary, not just one segment of the market.
Click here to read the February 2010, Annual Report of the Middle-Class Task Force.





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