Regulation of the Day 131: Airport Vendors

A regulation passed in 2005 states that “at least 10 percent of all business at the airport selling consumer products or providing consumer services to the public are small business concerns (as defined by regulations of the Secretary) owned and controlled by a socially and economically disadvantaged individual (as defined in section 47113(a) of this title).

The requirement that the size of a business be taken into account is puzzling; a company’s size has little to do with whether it will do a good job or not.

I would also argue that airports are disadvantaged enough, having already to deal with the TSA, the FAA, the DOT, and others. Snark aside, airports are poorly run, almost without exception. Forcing them to hire vendors and contractors on factors other than price and performance is unlikely to improve matters.

Disadvantaged business quotas bring up a third issue: What happens if a disadvantaged business owner prospers through her hard work, and can no longer be considered disadvantaged? Does she get kicked out of the airport?

That thorny question would have been put to rest on April 21 of this year, when a built-in sunset provision would have made the regulation expire. Wayne Crews and I have written before favoring sunset rules for all new regulations. It’s a painless way to automatically get rid of rules when they become obsolete, or that turn out to be more trouble than they’re worth.

If a rule merits another five years on the books, Congress should be able to vote on it.

In this case, however, the Department of Transportation is getting set to renew the disadvantaged quota program all by itself. Permanently.

According to the DOT, leaving in the sunset provision “would simply cause confusion and disruption, making it more difficult for all parties concerned to carry out their responsibilities under the statute.”

Laws are supposed to be made by legislative branch, not the executive. What we have here is one more case of regulation without representation, out of thousands. You can read all about it in today’s Federal Register.