If the gov't is involved it is not the free market anymore. And many of the companies covered under this don't have the option to go somewhere else--their whole business is government business. So it is effectively the gov't dictating how management runs the business, which is an unwarranted intrusion of gov't power into private enterprise.
Kind of like firing the CEO of GM.
It's not the government dictating how management runs the company, its dictating terms for future contracts. I see no reason that the government shouldn't have any less rights in creating contracts than I do.
If a contractor does all of their business with the government, and don't like the terms of the contract (which, by this amendment are JUST stopping companies from doing something that is borderline illegal anyway), that's the contractor's problem. Adapt to the contract rules, or fail. That's how free markets work: provide the needed service, or fail.