Home Depot works to avoid federal contractor status, regulations

Tuesday, June 18th 2002, 12:00 am
By: News On 6

ATLANTA (AP) _ The Home Depot Inc.'s edict to its stores to stop doing business with Uncle Sam is designed to avoid the byzantine array of rules and paperwork covering federal contractors.

The nation's second-largest retailer behind Wal-Mart Stores Inc. and the largest home improvement chain recently reiterated to store managers its policy of not doing business with the government, prompting at least one federal agency to scramble for a new supplier.

The company's notice said credit card customers would be sent notes informing them no purchases would be allowed that would entangle the company with three federal laws or executive orders, which deal with equal employment, affirmative action and discrimination.

The company also will not accept purchase orders or even cash if the items are being used by the federal government.

But Washington attorney Lawrence Lorber, former director of the Labor Department's Office of Federal Contract Compliance Programs, said Monday that big companies with far-flung operations often don't even know they could be considered a federal contractor.

A company with more than 50 employees and annual government sales of more than $50,000 is subject to affirmative-action reporting rules. Those require the company to file hiring records and other data _ a task which can lead to a mountain of expensive paperwork and legal fees.

``It's not that they don't want to sell to the government, it's that they don't want to bring all these ancillary requirements,'' Lorber said. ``It's a lot of money and a lot of effort and a lot of record-keeping and data-keeping and all the rest.''

And because of the range of federal agencies and vendors, no one sets an automatic classification for companies that pass that threshold, he said. Banks, covered by federal deposit insurance, and many insurers are typically considered federal contractors, he said.

Home Depot officials said Monday the policy is restated periodically because of the large number of new employees it hires.

Spokesman Jerry Shields said the company regularly reviews whether to pursue government business, but that it's not prepared administratively to file all the required information.

It's unclear how much Home Depot earned from government sales last year, but Shields said it was ``not a significant amount of money as far as our business is concerned.''

The OFCCP completes about 3,000 compliance reviews annually, far fewer than the thousands of companies selling to Uncle Sam.

``The thing is, in the world of federal contractors, you may be one and didn't even know about it,'' Lorber said.

The General Services Administration is researching the laws Home Depot expressed concern over and plans to seek a meeting with the company, said Sue McIver, director of the GSA's Services Acquisition Center.