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 Florida Public Interest Research Group (PIRG)
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. Florida PIRG Education Fund’s 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 Brad Ashwell, Consumer
Advocate for Florida PIRG 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 Ashwell. “These federal
agencies have been fooled time and time again by the same companies yet they allow
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 GulfCoast. 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.
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Florida PIRG Education Fund is a
non-profit, non-partisan public interest advocacy organization.
