Presidential Authority to Impose Requirements on Federal Contractors

Vanessa K. Burrows
Legislative Attorney

Kate M. Manuel
Legislative Attorney

Executive orders requiring agencies to impose certain conditions on federal contractors as terms of their contracts have raised questions about presidential authority to issue such orders. Recently, the Obama Administration circulated, but did not issue, a draft executive order directing “every contracting department and agency” to require contractors to “disclose certain political contributions and expenditures.” The draft order cites the President’s constitutional authority, as well as his authority pursuant to the Federal Property and Administrative Services Act of 1949 (FPASA), which authorizes the President to prescribe any policies or directives that he considers necessary to promote “economy” or “efficiency” in federal procurement. The draft executive order refers to FPASA’s goals in that it directs actions “to ensure the integrity of the federal contracting system in order to produce the most economical and efficient results for the American people.” The draft order has been characterized by some as an “abuse of executive branch authority” because it resembles the Democracy is Strengthened by Casting Light on Spending in Elections (DISCLOSE) Act that the 111th Congress considered, but did not pass. If issued, the draft order may face legal challenge.

The outcome of legal challenges to particular executive orders pertaining to federal contractors generally depends upon the authority under which the order was issued and whether the order is consistent with or conflicts with other statutes. Courts will generally uphold orders issued under the authority of FPASA so long as the requisite nexus exists between the challenged executive branch actions and FPASA’s goals of economy and efficiency in procurement. Such a nexus may be present when there is an “attenuated link” between the requirements and economy and efficiency, or when the President offers a “reasonable and rational” explanation for how the executive order at issue relates to economy and efficiency in procurement. However, particular applications of presidential authority under the FPASA have been found to be beyond what Congress contemplated when it granted the President authority to prescribe policies and directives that promote economy and efficiency in federal procurement.

Some courts and commentators also have suggested that Presidents have inherent constitutional authority over procurement. A President’s reliance on his constitutional authority, as opposed to the congressional grant of authority under the FPASA, is more likely to raise separation of powers questions.

In the event that Congress seeks to enlarge or cabin presidential exercises of authority over federal contractors, Congress could amend FPASA to clarify congressional intent to grant the President broader authority over procurement, or limit presidential authority to more narrow “housekeeping” aspects of procurement. Congress also could pass legislation directed at particular requirements of executive orders on federal contractors. For example, in the 112th Congress, legislation has been introduced in response to the draft executive order (e.g., H.R. 1906; H.R. 1540, § 845; H.R. 2017, § 713; S. 1867, § 845).


Date of Report: December 9, 2011
Number of Pages: 27
Order Number: R41866
Price: $29.95

Follow us on TWITTER at http://www.twitter.com/alertsPHP or #CRSreports

Document available via e-mail as a pdf file or in paper form.
To order, e-mail Penny Hill Press or call us at 301-253-0881. Provide a Visa, MasterCard, American Express, or Discover card number, expiration date, and name on the card. Indicate whether you want e-mail or postal delivery. Phone orders are preferred and receive priority processing.