CMD created a stir last week when it posted the full text of more than 800 model bills drafted by the American Legislative Exchange Council (ALEC). ALEC’s corporate members (several of which are in POGO’s Federal Contractor Misconduct Database) draft bills pushing a pro-business agenda – lower taxes, greater restrictions on labor unions, weakened government regulation, tort reform. ALEC’s legislative members take these bills and introduce them in state legislatures around the country. About 20 percent become law.
Some of ALEC’s draft bills address contracting and privatization. Not surprisingly, they are strong supporters of both. For example, the Open Contracting Act would prohibit government entities from imposing labor requirements when awarding contracts or grants. The Competitive Contracting of Public Services Act would make most government services eligible for privatization based purely on cost considerations. (The Competitive Contracting of the Department of Motor Vehicles Act would apply specifically to state motor vehicle agencies.)
The Public-Private Fair Competition Act, however, would take privatization to a whole new level. It would prohibit state governments from performing any function the private sector also performs. This is known as the Yellow Pages Test, a pro-privatization belief that if a function can be found in the phone book, the government should outsource it to contractors rather than perform it in-house. (The Yellow Pages Test was recently brought up in Congress again.) This bill would effectively put state governments at the mercy of private companies, who would be able to sue the government and recover damages caused by government competition. So much for ALEC’s supposed hardline support for tort reform.
As far as we know, none of the aforementioned contracting bills have become law, but ALEC and its financial backers are not ones to give up so easily. However, with resources like ALEC Exposed and ALEC Watch, the public finally has a way to keep an eye on this organization.
Neil Gordon is a POGO Investigator.