Fraud Fight Has U.S. Seeking to Ban Record Number of Suppliers
Wishing the Government Accountability Office and the agencies in charge of oversight, a banner year of suspensions and debarments in 2012. Here’s hoping the DoJ grows a set in the new year and prosecutes those who have “gotten away with it” for far too long. Honestly Eric (Holder) you can’t possibly believe the American taxpayer is gullible enough to believe the only criminals making bank in Iraq and Afghanistan are the handful of petty criminals you have indicted to date?
~ Ms Sparky & Forseti
(Money News) – December 27, 2011 – The Obama administration, under pressure from Congress to weed out government suppliers for ethics violations or poor performance, has proposed to ban almost as many contractors this year as President George W. Bush did in his entire second term.
Federal agencies have proposed blocking 1,006 companies and individuals from contracting so far this year, as well as asking a judge to ban a unit of food-processing giant Cargill Inc. of Minneapolis, in a process known as debarment. That is 16 percent more than the 868 contractors that U.S. agencies proposed to block in all of 2010, and only 70 fewer than the 1,076 contractors that U.S. agencies sought to debar under Bush from 2005 to 2008, according to data provided by the General Services Administration.
U.S. agencies are under pressure after a series of congressional hearings and reports from inspectors general and the Government Accountability Office faulted procurement officials for failing to keep unqualified or ineligible vendors out of the $500 billion-a-year federal market.
“We are starting to see the pendulum swing to more contractor accountability, but government needs to do a lot more to ensure it only works with responsible contractors and thereby protects the public,” said Scott Amey, general counsel for the Project on Government Oversight, a nonprofit watchdog group.
The proposed debarments appear to be the most since at least 1997, the earliest year comparable data was available, and may be a record, said Meredith Whitehead, a project manager with the General Services Administration, which oversees the online database used to track contractors barred from winning government work.
Federal spending on contracts for goods and services has more than doubled since 2000, to $534 billion in the fiscal year ended Sept. 30, 2010 from $213 billion in the fiscal year ended Sept. 30, 2000.
Some contractor advocates say the government may be too aggressive in pursuing debarment in some cases, since even proposing a company for debarment means it won’t be able to win new contracts until the situation is resolved.
“The use of suspensions and debarments is getting increasingly hostile,” said Stan Soloway, president of the Professional Services Council, a trade association of government contractors based in Arlington, Virginia.
Moira Mack, a White House Office of Management and Budget spokeswoman, said the agency provides due process to all contractors facing suspension or debarment.
“For too long, the government failed to use suspension and debarment, even in the face of egregious conduct by contractors,” Mack said in an e-mailed statement. “That’s why this administration has been pushing for tougher oversight of contractors, and we’ve seen results.”
Reasons to Debar
Contractors can be proposed for debarment for poor performance as well as a variety of ethical issues, including overbilling or falsely claiming a company is owned by a disabled veteran in order to win special awards. In some cases, debarment is automatic, such as when a contractor is convicted of violating the Clean Air Act or Clean Water Act. Debarment typically lasts three years.
Last month, the U.S. Department of Labor said it will ask a judge to debar Cargill Meat Solutions, a Wichita, Kansas-based subsidiary of Cargill, after the company refused to agree to a settlement of allegations it discriminated against female job applicants seeking entry-level production jobs and favored Asians and Pacific Islanders over other applicants.
The government’s allegations are unfounded, Mike Martin, a Cargill spokesman, said in an e-mailed statement.
After a company has been proposed for debarment, it can take a year or more before a final decision is made, said Robert Burton, a former acting administrator of the Office of Federal Procurement Policy during the Bush administration who is now a partner at Venable LLP in Washington.
“It can be a very long process, meanwhile the impact on you as a contractor is the same as if you’ve been found to have committed the wrongdoing,” Burton said in a phone interview. “It can have a devastating impact on a company, especially a small business that may be out of business by the time the proceeding is completed.”
A hasty decision by the U.S. Department of Veterans Affairs led to four men and two companies being at least temporarily blocked from government work this year, and as many as 80 people losing their jobs, Mark Leach, an attorney for the debarred parties, argued before a Kentucky federal judge in U.S. District court proceedings this September.
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