We've got our eyes on you

Watchdog group launches database of alleged misdeeds

What the numbers reveal

The Project on Government Oversight's Federal Contractor Misconduct database draws on public information sources to highlight contractor penalties for possible wrongdoing. Of the top 50 contractors measured by revenues:

  • Eight have zero instances of misconduct on record.
  • Lockheed Martin is the No. 1 contractor and also has the largest number of instances of misconduct, at 39.
  • Exxon Mobil Corp. has the highest dollar amount of penalties, $4.8 billion on 25 separate instances.
  • McKesson Corp. had the second-highest penalty total, $982 million for just four violations. Of that figure, $960 million was a civil settlement for accounting fraud committed by officials at health information technology provider HBO and Co. in the late 1990s, before McKesson acquired the company in 1999.

What is POGO?

Full name: Project on Government Oversight.

Status: Nonprofit watchdog group.

Headquarters: Washington.

Leadership: Danielle Brian, executive director; American University assistant professor David Hunter, chairman of the board.

Audience: Activists, advocates, media and the public.

Mission: POGO investigates and reports on allegations of ethical lapses, fraud, waste and other issues at federal agencies.

Web site: pogo.org

A public watchdog group has launched a database to track contractor misconduct that, its creators say, will provide an additional tool for contracting officers to use in making their award decisions. But some government procurement analysts say the group's efforts are misguided, if well-intentioned.

That group, the Washington-based Project On Government Oversight, has tracked contractor misconduct for years. The new database at http://www.contractormisconduct.org is improved and more user-friendly than past efforts, according to the organization. It includes instances of misconduct for the top 50 government contractors, dating back to 1995.

Scott Amey, POGO's general counsel, said the group gets the information for the database from public sources, including government records, court documents, company financial filings and even company press releases.

Although POGO could maintain the database indefinitely, Amey said he hopes that won't be necessary.

"I'm hoping that the government takes over this task and tries to present very accurate contractor performance and responsibility information to its program and contract officers," he said.

Contract officers turn to government resources such as the Past Performance Information Retrieval System to learn about a company's history. Agency officials can identify companies that have been suspended or debarred, making them ineligible for contract awards. But the exisiting systems do not show everything that might reflect on the track records of companies that are viable candidates for contracts, Amey said.

"All those [existing systems] are just giving you the edge of the puzzle," he said. "They're not seeing all of the civil cases, criminal cases or settlements that have taken place."

POGO's launch of the database came around the same time that Rep. Carolyn Maloney (D-N.Y.) introduced a bill to create a federal database that would track civil, criminal and administrative actions against contractors. Maloney has introduced similar legislation in past sessions of Congress, Amey said, but the new climate of oversight that came with the Democratic takeover of Congress last year may give it a better chance of succeeding now.

"Mrs. Maloney's point is well taken," said Stan Soloway, president of the Professional Services Council. "If there are companies that are routinely gouging the government, what are we doing giving them business? The creation of a database in itself doesn't solve that."

Soloway, a Washington Technology columnist, said the POGO database is not "an accurate or appropriate source to be used in a procurement decision." POGO presents punitive actions against companies without context or depth, he said. A company that has paid a large fine for a one-time tax issue or environmental infraction may rank high on POGO's hit list yet not show any evidence of a pattern of abuses.

"No one suggests that we should ignore corporate misbehavior," he said, but determining whether a company's actions suggest a bad ethical climate or a simple mistake is "actually incredibly complicated."

There's a philosophical issue at stake, too, Soloway said. Whether a person or a company breaks the law, the law sets a penalty. The guilty party pays a fine, or perhaps spends time in prison. Contractors can be suspended or debarred, losing their rights to sell to agencies.

After a suspension is lifted, a fine paid or a sentence served, that is supposed to be the end of the matter, with the debt to society paid, he said.

Finally, Soloway said, it isn't safe to assume that any systems are needed other than those that already exist.

"I'm not convinced at all that we actually have a mammoth problem," he said. "I have not seen any substantial evidence that we are routinely and blithely giving contracts out to scofflaws."

Larry Allen, executive vice president of the Coalition for Government Procurement, said agency officials already have access to ample information about contractors. "The POGO database serves primarily as a political statement, not any real tool intended for government use," he said.

Amey disputed Soloway's contention that the database lacks context. Click-through links allow users to see the details of penalties assessed against companies. "That is part of the transparency that we're hoping to provide, so you can parse out contractor fraud from an environmental case or a labor case," he said. "What I am trying to do is present the full picture."

He added that the database, which is accessible to anyone who wants to use it, is intended to be an adjunct to the normal contracting process, not a replacement for anything. "It really is just another tool in a contract officer's toolbox."
Amey also invites contractors listed in the database to respond and tell their side of the story. Some have, and others have not, he said.

Guy Timberlake, chief executive officer and chief visionary officer at the American Small Business Coalition, said the database could have uses to other government officials ? and interested parties outside the government ? and not just contract officers.

"If the information maintained within the database can be corroborated, it would serve the interests of those groups and officials with oversight initiatives," he said.

Associate Editor Michael Hardy can be reached at mhardy@1105govinfo.com.

About the Author

Technology journalist Michael Hardy is a former FCW editor.

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