US May Ban Buying From Safety Violators
Should the federal government refuse to buy goods and services from known safety violators?
That's a $38 billion question that a federal inter-agency committee will discuss at a meeting in Washington Feb. 12.
Supporters say the change would help prod corporations to clean up serious health and safety violations, preventing hundreds of injuries and deaths each year. Opponents argue such a ban would arbitrarily tie the hands of government agencies, unfairly penalize companies, and possibly put some contractors out of business outright.
The move, which could be enacted either by Congress or presidential order, would be controversial, but not without precedent.
Current law prohibits convicted violators of clean air and water laws from getting federal contracts. And in 1996 President Clinton issued an executive order barring federal contracts to companies found guilty of employing undocumented immigrants.
Last year, Democratic Sen. Edward Kennedy of Massachusetts and Paul Simon of Illinois requested Congress's General Accounting Office to investigate the issue. The GAO reported that 261 companies with federal contracts in fiscal 1994 faced significant proposed fines as violators of Occupational Health and Safety Administration (OSHA) rules.
Those companies received $38 billion in federal contracts. Among the suppliers listed in the report are Boise Cascade Corp., Ford Motor Company, and other well-known corporations.
So far, neither Congress nor Mr. Clinton has been moved to action by the GAO report. But a committee representing 38 executive-branch agencies, including the Defense Department, is scheduled to consider the issue next week.
Even without direction from Congress or the president, government agencies have the inherent power to bar any company in "protection of the public interest," notes Robert Meunier, who chairs the group, called the Interagency Suspension and Debarment Coordinating Committee.
Mr. Meunier stresses, however, that debarment should not serve as an additional penalty for some other offense. "We don't want to use debarment and suspension to coerce contractors as an alternative punishment for another crime," he says.
Supporters of the changes argue that companies causing workplace deaths and injuries should face some coercion. Matthew Carmel, president of Osha Data, a private company that provides OSHA information to government agencies and the private sector, has long lobbied for stricter adherence to OSHA standards.
Mr. Carmel, based in Maplewood, N.J., has helped both federal and New Jersey lawmakers draft legislation. He advocates barring federal contracts to any company found guilty of willful or repeat violations of OSHA rules during the past five years. Connecticut and Maine already have laws prohibiting state contracts for companies convicted of major safety violations.
Carmel also proposes that companies with excellent safety records get preferential treatment. He suggests a company would get federal contracts even if bids were up to 10 percent higher than those of competitors.
Such a "push-pull mechanism ... would be a very effective way of reinventing government," Carmel says.
Many businesses oppose such a system. Peter Chaney, health and safety director at the Washington-based Association of General Contractors, says Carmel's proposal, cutting off federal contracts, could bankrupt some construction companies, a harsh penalty for sometimes-unfair OSHA policies.
A firm cited by OSHA for lacking guard rails on a building site in California, Mr. Chaney says, could be found guilty of a "repeat violation" if it lacked guard rails at a New York site.
Similarly, a general contractor could receive a repeat or willful violation for the actions of its subcontractors, even if the general contractor had no knowledge of the problem. OSHA has a number of such arbitrary rules that unfairly penalize employers, argues Chaney. "The bottom line is the Occupational Safety and Health Administration just has not gotten its act completely together," he says.
Carmel concedes that sometimes OSHA makes arbitrary decisions. But a far bigger problem, he argues, is companies failing to make their workplaces safe. Since the 1980s, funding cutbacks have severely curtailed OSHA inspection capabilities, he adds.
The inter-agency committee is discussing guidelines for individual agencies to debar federal contractors who violate OSHA rules, including how serious the violations would have to be. Some time after its meeting, the committee will pass its recommendations on to the GAO for wider consideration.