Today, ATR sent the following letter to President Obama, Members of Congress and OMB Secretary Orzsag opposing a contracting change known as "high road contracting." This policy will result in thousands of companies being blacklisted from competing for government contacts. The full letter is below.

In an accompanying press release (available here), Norquist added:

“This is not a novel idea. Organized labor has been trying to leverage Washington lawmakers into giving them more, larger contracts for years,” said Grover Norquist, President of Americans for Tax Reform. “If high road contracting is implemented, unionized companies will receive much of the $500 billion worth of federal contracts issued every year and thousands of other businesses and companies will be shut out of a supposed ‘competitive’ process.”

[PDF DOCUMENT]

30 March 2010

The Honorable Barack Obama
1600 Pennsylvania Avenue NW
Washington, DC 20500

Dear President Obama:

On behalf of Americans for Tax Reform, and millions of taxpayers nationwide, I am writing to express strong opposition to “high road” contracting as proposed in your White House Middle Class Task Force report.

Although not a new idea, the most recent campaign to change longstanding federal procurement practices has been deemed high road contracting. Currently, government agencies award contracts to companies who will perform the required task successfully for the lowest price -- a competitive bidding process that saves taxpayers money. Looking to upend this practice, labor unions want the procurement process to award contracts to companies based on how much they compensate their workers.

High road contracting mandates that federal agencies show preference to companies that pay their workers an artificially inflated wage, many of which are large, unionized companies. With the federal government awarding more than $500 billion in contracts annually, adopting high road procurement practices would have a negative effect on the economy, especially affecting small businesses, and unnecessarily raise government spending levels.

Five Republican Senators, Susan Collins (R-Maine) Robert Bennett (R-Utah), Lindsey Graham (R-S.C.), Tom Coburn (R-Okla.), and Olympia Snow (R-Maine), sent the Office of Management and Budget Director Peter Orszag a letter echoing these concerns:

“(High Road contracting) could increase the cost of Federal acquisitions. The factor could unduly distort the best value propositions and undermine the government’s responsibility to act as a good steward of Americans’ tax dollars... Small businesses are critical to the success of our economy...yet the proposed reforms could preclude them from competing effectively for contracts.”

Requiring businesses to raise workers wages prices many unskilled workers out of jobs; for businesses, it simply isn’t worth hiring unproven labor. Unnecessarily inflating the price tag for federal contracts hardly seems responsible given the already high tax rates and deficit level. Therefore, I urge you abandon pursuit of this economically fatal bias contracting.

Please contact Brian Johnson at bjohnson@atr.org in my office for more information.

Onward,
 
Grover G. Norquist

cc:    Peter Orszag, Director of the Office of Management and Budget
All members of Congress