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Obama Administration May Use Federal Procurement To Encourage Pro-Worker Policies

There are suggestions in the media that the Obama administration is strongly considering adopting a "High Road Contracting Policy" which would provide preference in federal procurement contracting to employers which offer their employees a "living wage," health insurance, retirement plans and paid sick days. Effectively, the Obama administration would leverage the federal government's purchasing power to enact "worker-friendly" policies, adding this to the other criteria for contracts, such as bidding price and performance. There are also indications that this may be enacted via a Presidential executive order.

By altering how it awards approximately $500 billion in contracts each year, the federal government would possibly disqualify more companies with labor, environmental or other legal violations and provide an edge to companies that offer their employees better levels of pay, health coverage, pensions and other benefits. The U.S. Department of Labor would have the responsibility to score the labor records of federal contractors. Because nearly one in four American workers is employed by companies that have federal contracts, the Obama administration may see this option as a way to portray itself as a defender of the middle class.

The outline of the plan is already drawing strong opposition from business groups and Republican lawmakers. They see it as a gift to organized labor and say it would drive up costs for the government, which is facing a $1.3 trillion budget deficit this year.

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