On April 13, 2011, the Obama administration released a draft Executive Order called “Disclosure of Political Spending by Government Contractors” (“Draft Order”) that contemplates requiring federal contractors to disclose political contributions when bidding on federal contracts. As currently drafted, the disclosure obligation would require contractors to disclose contributions of the company and its subsidiaries, affiliates, officers and directors. The Draft Order is intended to “increase transparency and accountability” in the contracting system so that the American public is “ensure[d] efficient and economical procurement process[es].”
The disclosures required by the Draft Order are loosely modeled after those found in state “pay-to-play” laws, but, unlike the state laws, the Draft Order does not limit or ban political contributions by contractors. Despite its more limited focus, the Draft Order has generated significant criticism from Congress and the contracting community for its potential to politicize the contracting process, chill political contributions, and create a myriad of burdensome recordkeeping and reporting requirements for contractors.
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