Taking the High Road

Next Steps for Cleaning Up Federal Contracting

SOURCE: AP/Jacquelyn Martin

Three American Infrastructure construction workers replace a sidewalk ramp as part of a federal contract in Silver Spring, Maryland.

By Karla Walter, David Madland | August 11, 2010

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Sunlight is a powerful force that can expose wasteful and abusive federal contracts. Private contractors took in more than a half trillion dollars in taxpayer money last year alone, but the public had little oversight over whether these funds went to responsible, law-abiding companies.

President Obama last week signed into a law a provision supported by the Center for American Progress Action Fund that would make public a government database that tracks contractors’ records of legal violations in their business dealings. This move will significantly improve public oversight of federal contracts worth billions each year.

The 2008 National Defense Authorization Act required the government to systematically collect data on contractor’s responsibility records—but this information was never made publicly available. CAP Action supported public disclosure as part of the American Worker Project’s high-road contracting proposal to reform government contracting, arguing that public has a right to know about the contractors who receive billions of taxpayer dollars.

The new provision was included as part of a supplemental appropriations bill amendment introduced by Sen. Bernie Sanders (I-VT). CAP Action and several other good government groups praised the amendment, which requires the General Services Administration to make most of the “Federal Awardee Performance and Integrity Information System” available to the public.

Making the database public is a big win for taxpayers, but the government must do more to ensure that only responsible companies receive federal contracts. The database only captures a small portion of contractors’ legal violations. It relies on company self-reporting—even though government enforcement agencies already track much of this data—and excludes too many types of violations, such as workplace violations and legal violations that occur on any work that was performed outside of a federal contract. Overburdened contracting officers also do not receive adequate guidance on how to determine responsibility or to fairly interpret contractors’ legal records.

The federal government has been awarding contracts to “low-road companies” that persistently violate the law and treat their workforce poorly for far too long. As the BP oil disaster clearly demonstrates, companies that persistently and egregiously break environmental and labor laws are a bad business risk.

Our high-road contracting proposal rectifies these areas of weakness. It would strengthen the database by expanding it to include all pertinent legal violations; clarify the standards for evaluating whether bidders demonstrate a satisfactory responsibility record; and provide guidance to contracting officers on how to interpret companies’ legal records when considering awards.

Public oversight is an important tool in ensuring that the federal contractors are responsible. But President Obama should also adopt the high-road proposal to provide the government with more of the tools it needs to protect taxpayers and ensure that lucrative federal contracts are only awarded to law-abiding, responsible companies.

Karla Walter is a Senior Policy Analyst and David Madland is Director of the American Worker Project at the Center for American Progress Action Fund.