February 04, 2019 Public Contract Law Journal

Offering a Carrot to Complement the Stick: Providing Positive Incentives in Public Procurement Frameworks to Combat Human Trafficking

by Nicole Fleury

Nicole Fleury is a J.D. candidate at The George Washington University Law School and a member of the Public Contract Law Journal. She would like to thank Judge Kyle Chadwick for guiding her throughout the writing process and Professor Karen Thornton for encouraging her to write about her passion. She would also like to thank her parents and sister for their unwavering support.

I.  Introduction

Trafficking in Persons (TIP) is a widespread human rights atrocity that is not limited to a single region of the world, gender, or form of exploitation. Though manifested in many ways, the unifying characteristics of this classification of abuse include the use of force, fraud, or coercion to exploit someone for his or her services in either commercial sex or various forms of labor.1 According to Human Rights First, approximately twenty-five million people are currently living as trafficking victims around the world.2

The United States government, in engaging with a wide spectrum of domes- tic and international business partners, has not avoided its reach.3 Through its procurement activities, the U.S. government is a party to contracts for goods and services that have been tainted by the exploitation of trafficked individuals.4 Considering the complexity of supply chains and number of contracts that the U.S. government enters into each year, this is hardly surprising. These atrocities may take many forms: a man forced to work in a mine extracting minerals that will produce goods purchased by the U.S. government,5 or a woman serving as a housekeeper on a U.S. military base while a third-party recruitment service withholds her identity documents and wages. A string of recent lawsuits demonstrates yet another scenario: an asylum-seeker awaiting civil immigration proceedings in a federally funded private detention facility is forced to work for $1 per day under threats of solitary confinement and other punishments.6

The U.S. government has acknowledged this stain on its procurement system and, over time, has established a regulatory framework that imposes requirements on contractors and subcontractors with accompanying punishments. These requirements include Federal Acquisition Regulation (FAR) Subpart 22.17 and Subparts 52.222-50 and 52.222-56. However, despite the fairly robust regulatory system in place to address trafficking in persons related to public procurement, evidence shows that abuses still occur in connection with U.S. government contracts,7 suggesting the current measures are insufficient. The U.S. Department of State admitted in its 2017 TIP Report that although the Department of Justice and other federal agencies were actively pursuing “[investigations] of debt bondage and excessive recruitment fees required of third-country nationals working on certain U.S. government con- tracts abroad,”8 there had not been a single federal criminal prosecution, civil action, debarment, or any other sanction of contractors during that fiscal year.9 

The U.S. government has an enormous amount of purchasing power, as it is the “single largest purchaser in the world and spends more than $500 billion USD a year on governmental contracts.”10 Thus, it is crucial that the federal government not pivot away from holding government contractors and subcontractors accountable. Instead, it must continue to include them in the anti-trafficking regime with a measured approach that works in concert with the principles of government contracting.11

This Note argues that adopting positive incentives for contractors in order to supplement the current procurement regulations will more effectively advance the goal of eradicating human trafficking. While the U.S. government has recognized that contractors and subcontractors are on the front lines of the abuse, it has failed to create a system that persuades companies to prioritize anti-trafficking efforts. To correct this issue, the U.S. government should implement a regulatory scheme that would make it within a company’s best interest to thoroughly and intentionally address the potential for trafficking-related offenses to occur during contract performance. In other words, the U.S. government should have in place a system that offers “carrots” to contractors in addition to putting them on notice about “sticks.”12 Rather than maintain an anti-trafficking procurement regime built solely of hollow requirements with threats of punishments for violations, the government should add an incentives framework that will encourage contractors to participate more rigorously in anti-trafficking efforts.13

The solution must avoid certain pitfalls. First, it cannot undermine the principles of the U.S. federal procurement system and the disincentives already in place. The intent of the solution is to harness the immense purchasing power of the U.S. government in order to advance its anti-trafficking goals, while not compromising the policies that inform government contracts, most notably the values of enhanced competition and procuring goods and services at best value.14 Second, it must not unduly harm the U.S. government’s business partners. When discussing regulations aimed at the private sector, especially those primarily motivated by intentions to further a social good, the argument commonly surfaces that the proposed restrictions would be overly burdensome to companies and ultimately fatal to their businesses. The recommendation in this Note sidesteps this criticism for two reasons: first, it identifies and relies on existing resources that would prevent compliance from becoming too expensive, and, second, it limits the applicability of the incentives to certain contracts and offerors.

This Note outlines this argument in five sections. Following the Introduction in Section I, Section II defines Trafficking in Persons and highlights the bipartisan U.S. government commitment to combating this global phenomenon. Section III considers the scope of this human rights violation within the context of public procurement. Section IV outlines the current anti-trafficking provisions in federal procurement law, noting that they serve as punishments, or “sticks.” Finally, Section V examines two different approaches to incorporating positive incentives into procurement systems: considering anti-trafficking efforts as an evaluation factor, or establishing set-asides for offerors that have demonstrated this effort. Specifically, this section looks to procurement frameworks in Argentina, Bolivia, Norway, and San Francisco that have incorporated incentivizing elements into their respective procurement systems with the express intention of furthering a social good.15 The section considers the benefits and challenges associated with each approach and argues that the U.S. federal procurement system would benefit from adopting an anti-trafficking evaluation factor.

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