Bush Admin. Delays E-Verify, Women’s Set-Aside In its final days, the Bush administration punted two of its most controversial contracting initiatives to the incoming Obama team. Regulators postponed the requirement that federal contractors check their employees’ immigration status through the E-Verify system, while SBA announced another delay in implementation of the set-aside program for woman-owned businesses. E-Verify The E-Verify rule will not take effect before Feb. 20, according to an announcement by the Federal Acquisition Regulation councils. It was originally scheduled to be effective Jan. 15. Explaining the delay, the councils cited a pending lawsuit by five business organizations. The U.S. Chamber of Commerce and others charged the Homeland Security Department violated the law by requiring contractors to use E-Verify, while the system is voluntary for all other employers. The Bush administration has argued that mandatory verification is a condition for doing business with the government, and no company is required to bid on a government contract. The suit is pending in U.S. District Court in Maryland. The rule would require most prime contractors and many subcontractors to verify the employment eligibility of all new hires, and of existing employees who work on a federal contract. Robin Conrad, executive vice president of the Chamber’s National Chamber Litigation Center, said the delay will give the Obama administration a chance to re-evaluate the rule. “We hope the incoming administration recognizes that the last thing American businesses need during these difficult economic times is more bureaucracy and higher compliance costs,” Conrad said. Women’s set-aside SBA is re-opening the comment period for the women’s set-aside program, partly because of a recent court decision on affirmative action, giving the Obama administration a chance to make the final decision on the long-delayed program. In November a unanimous three-judge panel of the U.S. Court of Appeals for the Federal Circuit in Washington ruled that the Defense Department’s contracting preference for small disadvantaged businesses was unconstitutional. Legal authorities differ on whether the decision in the Rothe case threatens other federal affirmative action programs. The court held that Congress and the Defense Department had not produced sufficient evidence of discrimination to justify preferential treatment for companies owned by racial and ethnic minorities. In authorizing the SDB program, Congress relied on disparity studies showing that minority-owned firms were getting less than their fair share of contracts. But the appeals court said those studies did not look specifically at DOD contracting to determine whether the department had discriminated. By contrast, in setting rules for the women’s set-aside, SBA analyzed federal contracting data on an industry-by-industry basis. Before setting aside a contract, each agency would have to determine that it had discriminated against companies in that industry—a provision that one advocate called a “poison pill.” Based on its analysis of the disparity studies, SBA proposed allowing set-asides for woman-owned firms in just 31 industries. Many women’s business advocates and members of Congress, including President Obama when he was a senator, have urged the agency to expand the program to cover additional industries. The new comment period is open until March 13. The women’s set-aside was signed into law by President Clinton in December 2000. Eight years later the Bush administration left office without implementing the program.