Shining Light on Contractor Fraud

A military spending bill signed into law by President Obama on July 29 includes a Sanders amendment to make a federal contractor fraud database accessible to the public.  The Federal Awardee Performance and Integrity Information System is a database created by the Clean Contracting Act of 2008 that lists incidences of misconduct by federal contractors.  The database is an important tool for tracking the behavior of federal contractors. It lists prior findings of liability relating to federal contracts, including findings from criminal, civil, and administrative proceedings.  The database also lists whether the contractor has ever defaulted on a prior federal contract.  Finally, it lists whether contractors have engaged in such egregious behavior to have been suspended or disbarred from contracting.  The Sanders amendment would require that the database be posted on the Internet, ensuring that the public has access to this critical, public information about where their tax dollars are going.

contractors“Today, with our national debt approaching $12 trillion, we hand out over $500 billion a year to federal contractors, many of which have a well-established history of systemic, illegal, and fraudulent behavior.  We cannot let these corporations continue to rip off American taxpayers,” said Sanders.  “The American people have every reason to expect that their tax dollars are well-spent.  For this reason, I am pleased that with this new legislation every contractor’s history of illegal behavior will be posted on a publicly-accessible online database.  I strongly expect that this new public awareness will put an end to handing out taxpayer-financed contracts to  corporations with a history of fraud.”

According to a front page article in the Boston Globe, defense companies and other major industries are trying to block the new public disclosure law.  More than a dozen groups, in a letter to congressional committees, hailed the provision “as a major advance in contractor accountability and transparency,” according to the Globe. 

The newspaper also reported:

In March, before the measure was passed, Obama supported the concept. “We’ll be able to see, before any new contract is awarded, whether a company plays by the rules, how well they’ve performed in the past,’’ Obama said at the time. “Did they finish the job on time? Did the company provide good value? Did the company blow their budget?’’ Within days of Obama signing the war funding bill, industry groups began urging the administration to exclude some information they contend could be damaging.

The Sanders contractor fraud database provision is part of Public Law No: 111-212 and reads as follows:

PUBLIC AVAILABILITY OF CONTRACTOR INTEGRITY AND PERFORMANCE DATABASE
Sec. 3010. Section 872(e)(1) of the Clean Contracting Act of 2008 (subtitle G of title VIII of Public Law 110-417; 41 U.S.C. 417b(e)(1)) is amended by adding at the end the following: `In addition, the Administrator shall post all such information, excluding past performance reviews, on a publicly available Internet website.'.

The Project on Government Oversight (“POGO”) wrote, “On July 29, 2010, President Obama signed into law a major advance in contractor accountability and transparency that quietly made its way through Congress shepherded by Sen. Bernie Sanders (I-VT). The Supplemental Appropriations Act of 2010 contains a provision that requires contractor responsibility data included in the government's new database, the Federal Awardee Performance and Integrity Information System (FAPIIS), to be posted publicly on the Internet.  This will open up an immense cache of valuable data regarding contract- and grant-related civil, criminal, and administrative responsibility histories of thousands of contractors and grantees that collectively receive hundreds of billions of taxpayer dollars every year.”

"POGO is incredibly pleased to see the government finally heed our call for the public availability of the contractor responsibility data. There was never any valid reason to keep this database from the public in the first place," stated Scott Amey, POGO's general counsel.  "We urge the GSA to waste no time in implementing the law."

To read the Globe article, click here.