Government Contracts Monitor
Federal Contractors May Be Required to Disclose Political Contributions
May 4, 2011
President Obama issued a draft Executive Order that will “require all entities submitting offers for federal contracts to disclose certain political contributions and expenditures that they have made within the two years prior to submission of the offer.”
The contemplated disclosure will include (1) contributions made to or on behalf of federal candidates, parties or party committees and (2) contributions made to third parties with the intention that the third party will use the contribution to make independent expenditures or electioneering communications. Additionally, the disclosure includes contributions from the bidding entity, its officers and directors, and its affiliates and subsidiaries as long as the aggregate amount of these contributions exceeds $5,000 to a given recipient in a given year. Thus, the Executive Order requires the disclosure of even the personal contributions from officers or directors of a bidding company. However, the disclosure requirements do not apply to public-sector unions or grantees.
The Executive Order is not yet final and is still going through the standard review and feedback process. However, if finalized as written, it will require the FAR Council to implement these requirements by the end of 2011. Additionally, all disclosed information will be made public in a centralized, searchable, sortable, downloadable and machine readable format on data.gov as soon as practicable after submission.
The stated goal of the Executive Order is to ensure that every stage of the procurement process is free from “undue influence of factors extraneous to the underlying merits of contract decision making, such as political activity or political favoritism.” However, it is already facing strong opposition from groups and individuals that believe disclosure of this kind will only make the source selection process more political. These opponents believe that “force-feeding” this information to contracting officers during the selection process will inject politics in a process that has been protected from politics by neutral selection criteria such as price, technical expertise, and past performance. Other opponents believe that these requirements will either discourage businesses from participating in politics or make them believe they must contribute to the party in power in order to compete for contracts. The president has not yet responded to the criticism, but one administration official has emphasized that president’s purpose behind the Executive Order is to bring “more accountability and transparency to a federal contracting system that has long needed reform.”
Katie Calogero is responsible for the content of this article.