Report calls for increased contractor scrutiny

Recent laws that require more disclosure by government contractors don't go far enough to effectively regulate those companies, according to a new report from the Center for American Progress.

Congress has moved in the right direction to make companies come under more scrutiny, but the Obama administration and incoming Congress need to do more, according to the report, titled “Making Contracting Work for the United States.”

To get more information from contractors, the Federal Funding Accountability and Transparency Act, which became law in 2006 and ultimately produced USASpending.gov, created an online database that details where government money is going and to whom. The bill was sponsored by then-Sen. Barack Obama (D-Ill.) and Sen. Tom Coburn (R-Okla.).

However, this Congress hasn't enacted similar laws. However, the fiscal 2009 National Defense Authorization Act (S. 3001), signed by President George W. Bush in October, includes several provisions that check contractors in other ways. It requires ethics safeguards related to contractors’ conflicts of interest and authorizes the Government Accountability Office to interview contractors’ employees.

Also, the fiscal 2008 Supplemental Appropriations Act (H.R. 2642) mandates greater fraud reporting requirements and requires certain contractors to disclose their top employees’ salaries.

The center's report, released Dec. 8, said federal officials need to systematically collect more information on contractors, such as subcontracting and employees' wages, and create a centralized database with those records.

“The database should be used by federal contracting officers when evaluating bids, as well as be available to the public because sunshine is a powerful force for exposing wasteful and abusive contracting,” the report stated. Meanwhile, a lack of contractor information weakens enforcement and accountability on companies, it said.

The report charges that the Bush administration actively sought to undermine reforms and weaken worker protections while requiring the agencies to collect less information from contractors during the procurement process. The result has been abuses that are either ignored or given inadequate weight when awarding contracts, the center said.

“Federal contracting is not supposed to work this way,” the report stated.

The report proposed hiring more contracting officers, increasing their training and having them improve monitoring of existing contracts, including targeted investigations into industries known for abuses.

“Contracting officers do not have easy access to information they need about a company’s record, especially for subcontractors, and are frequently overworked and understaffed, limiting their ability to do the hard work of holding companies accountable,” according to the report.

Although he said the report makes some worthwhile recommendations, Stan Soloway, president of the Professional Services Council, an industry group, added that he disagreed with its underlying assumptions.

“Unfortunately, the rhetoric woven throughout the report, coupled with the incorrect presumption as to the accuracy or irrelevance of much of its underlying ‘data,’ serves to paint a larger and inaccurate picture of the current contracting environment,” he said. “In so doing, this report undercuts the valid recommendations presented in the report.”

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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