State and local governments finance millions of jobs across our economy with the hundreds of billions of dollars they spend each year to purchase goods and services. Yet jobs created through government contracting are often substandard, paying very low wages and involving poor working conditions where employment law violations are common.1 Such jobs not only hurt America’s workers; they also undermine the quality of goods and services delivered to government agencies and the public, and often result in significant hidden costs for taxpayers.
Growing numbers of state and local governments are therefore adopting “responsible contracting” reforms to improve the quality of jobs generated by their procurement spending. This report identifies the best practices in government contracting that are allowing state and local governments to significantly raise standards for workers and secure better value for taxpayers. They are accomplishing these goals by reducing the hidden costs taxpayers often bear when workers are paid poverty wages such as income assistance and health benefits for the uninsured, improving the quality of goods and services taxpayers receive, and increasing the number of companies competing for government contracts.2
This toolkit outlines reforms that can improve the quality of the jobs generated by government contracting and supplements other contracting reform blueprints that chiefly focus on improving transparency and accountability. The key strategies inventoried in the toolkit are:3
- Careful review of decisions to contract out
- Prescreening contractors for responsibility
- High standards for wages and benefits
- Incentives to raise wages and benefits above the legal floor
- Strong post-award enforcement
- Increased data collection and transparency
State and local governments can replicate and expand on these reform models that have been used successfully across the country to ensure that contracting delivers the best value for taxpayers, helps level the playing field for high-road businesses, and creates the types of good jobs communities need. Even governments that have pioneered the contracting practices cataloged here have opportunities to improve them further with the help of the resources in this toolkit.