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 Maryland PIRG Foundation.
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. Maryland PIRG Foundation
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 David Kosmos of Maryland PIRG Foundation.
“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 Kosmos. “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.
Maryland PIRG Foundation is a
non-profit, non-partisan public interest advocacy organization.
