Companies
with immediate past histories of shoddy work and fraudulent practices
still receive billions of dollars in federal contracts, according to a
new report by the Wisconsin Public Interest Research Group (WISPIRG)
Education Fund
The report, Forgiving Fraud and Failure: Profiles in Federal Contracting,
highlights nine representative examples of new, often no-bid contracts
that were granted to companies with recent records of questionable
performance. The WISPIRG Education Fund report cites secretive
practices, lax oversight, weak rules and lack of competition for the
problems uncovered by the study.
In each of the cases profiled, companies received new contracts during
or shortly after having negotiated settlements in cases of poor
performance. In several instances, contracts were actually awarded with
less competition after problems surfaced than before.
“Yesterday’s
congressional hearings involving the private security contractor
Blackwater USA raised serious questions of accountability,” said Bruce
Speight of the WISPIRG Education Fund. “But whether the questions are
about Blackwater, data breaches involving Unisys, or the contractors
cited in the report, we should understand that these are not isolated
events. Congress must see the forest for the trees and pass systemic
reform.”
Last year, Senator Barack Obama ( Ill.) and Senator Tom Coburn ( Okla.)
championed a critical first step in opening up the contracting process.
They sponsored the Federal Funding Accountability and Transparency Act
to establish a publicly accessible, searchable, online database of
information on federal contractors.
“The
Federal Government spends billions of dollars on federal contracts with
weak and sometimes no oversight.” said Senator Obama. “We have to shine
more light on the ways of Washington and make sure public funds are
used to further national interests rather than undermine them. I
applaud efforts to open government contracting to public scrutiny. The
American people have a right to expect transparency and accountability.”
“Taxpayers
have a right to know whether their dollars are being used efficiently
and effectively. This is an important report that sheds light on
contracting abuses, which are far too common in the federal
government,” said Senator Coburn, M.D.
Problems were found across the board and were not isolated to any
particular agency. Questionable contracting decisions included:
-
purchases by the Army, Navy and Air Force for equipment from
contractors that had previously delivered faulty or untested equipment;
- purchases by the IRS for data management and security from companies that had recently experienced serious data breaches; and
-
purchases by the Federal Emergency Management Agency for relief efforts
after Hurricane Katrina from companies that had recently been charged
with defrauding the government.
“These
examples show a pattern of turning a blind eye to serious problems when
spending public funds,” said Speight. “Fool me once, shame on you. But
these federal agencies have been fooled more than twice. Shame on them
for allowing the abuses to continue.”
Federal contracting cost taxpayers $422 billion last year, according to
the report. Purchases ranged from goods and services for the Iraq war
to hurricane relief efforts along the Gulf Coast. Contracting has
become the fastest growing portion of federal discretionary spending.
The report recommends taking immediate steps to establish
accountability in the contracting process including: increasing
disclosure of contract information; increasing competition; and
strengthening the rules to screen bad actors.
Download the report here.
