Industry groups, such as the U.S. Chamber of Commerce, fought aggressively against the rule, arguing that it amounts to "blacklisting" -- that companies could be barred from receiving federal contracts with no due process. In fact, each determination under the rule was to be made on a case-by-case basis for the contract in question, and would not constitute "debarment" for all federal contracts. In other words, a company that is denied one contract on the basis of its legal track record is still eligible to be considered for another federal contract. The blacklist existed only in the imagination of industry lobbyists.
The allegations of the rule's threat to due process were equally dubious. The rule required contracting officers to coordinate adverse determinations with agency legal counsel, to notify bidders if found non-responsible, and to provide the basis for that determination. If a company disagreed with that determination, the Federal Acquisition Regulation already provides for an appeal process (as directed in Executive Order 12979, Agency Procurement Protests). Moreover, the rule also made clear that in making a judgment, contracting officers should give the greatest weight to convictions or civil judgments rendered against the prospective contractor in the preceding three years.
Nonetheless, as in other cases, the administration proved very responsive to industry's objections, first suspending the rule back on April 3, 2001, signaling its eventual repeal. At the time, OMB Watch submitted testimony to the administration objecting to its proposed action.