The Bush administration has revoked a blacklisting regulation released under the Clinton administration that would have made violations of labor and environmental laws count in federal contract competitions. The regulation, which had gone into effect in January 2001 after the final rule was published in the final days of the Clinton administration, was strongly opposed by the business community.

"This regulation was nothing more than an attempt to implement a major change in labor law enforcement through federal procurement policy," said Kirk Pickerel, president and CEO of Associated Builders and Contractors (ABC), which praised the decision. The Bush administration's action now restores the federal contracting procedure, returning safeguards for fair competition to the process, according to Pickerel.

"This rule gave government agents blanket discretion to blacklist federal contractors based on subjective and arbitrary notions of satisfactory compliance with any federal, state or even foreign law," said Randel Johnson, vice president for labor and employee benefits for the U.S. Chamber of Commerce.

The regulation would have revised the Federal Acquisition Regulation requiring all federal contractors to certify in writing to a three-year record of "satisfactory compliance with federal laws, including tax laws, labor and employment laws, antitrust laws, and consumer protection laws" as part of a "satisfactory record of integrity and business ethics."

Pickerel said the rule would have imposed new penalties on contractors accused of violations, regardless of whether those accusations were valid. "This regulation clearly invited abuse from disgruntled employees, labor unions, competitors and others. Contractors would have been held hostage to erroneous claims made through 'salting' efforts and corporate campaigns against their firm," he said.

In December 2000, ABC joined with The Business Roundtable, the U.S. Chamber of Commerce, the National Association of Manufacturers and Associated General Contractors in a lawsuit against the blacklisting regulations. The lawsuit was withdrawn when the Bush administration published a proposed rule in April 2001 rescinding the Clinton regulation.