In the President’s first address to Congress, two statements received near-unanimous standing ovations: his advocacy for a major infrastructure rebuilding effort, and his continued promise to “drain the swamp” of political influence-peddling and corruption. In the infrastructure world, these two themes come together with so-called “Pay to Play” laws, which restrict political contributions by businesses that have received or are trying to obtain government contracts, as well as by their owners, officers, and other principals.
At FHWA, my colleagues and I struggled mightily with these laws proliferating around the country. The basic question was this: did these restrictions run afoul of 23 U.S.C. § 112, which prohibited rules that would unduly limit competition for contracts involving federal funds? The public certainly had the right to know that large contracts weren’t being awarded as a result of political contributions. On the other hand, if that sort of political activity eliminated major contractors from bidding on surface transportation projects, would the cost of those projects increase due to lack of competition? There were no easy answers.
My colleagues in Venable’s Political Law Practice Group have prepared this summary of “Pay to Play” laws, practical steps to help would-be contractors on the federal, state, and local levels, and a brief update on current trends in this field. Any trillion-dollar infrastructure package will come with some strings attached, and “Pay to Play” may very well be one of those strings. Creating or enhancing a compliance plan to address these kinds of restrictions is advisable now, before any new money hits the streets.