GAO: Agencies need more policing of contractors

Federal contractors may be getting away with fraud or shoddy work, according to a Government Accountability Office study of five years\' worth of federal contra...

Most federal agencies aren’t doing enough to police companies with government contracts, a new report by the Government Accountability Office suggests.

GAO analyzed five years’ worth of government contracts. It found that only a handful of agencies effectively sanction contractors by either suspending or disbarring them from receiving future government business. Six agencies that awarded billions of dollars to contractors never suspended nor disbarred any of them.

“Common sense would seem to suggest these agencies are not looking for and thus not uncovering fraud on the part of their contractors. In some cases, though, these agencies may simply accept poor performance or staff may not complete the file of paperwork or help others avoid the same bad contractors in the future,” said Rep. James Lankford (R-Okla.).

Lankford chairs the House Oversight and Government Reform Subcommittee on Technology, Information Policy, Intergovernmental Reform and Procurement Reform, which called GAO and several agency suspension and disbarment chiefs to testify Thursday.

While governmentwide policies are detailed, each agency has its own program and procedures for reporting, investigating and referring suspension and debarment cases. GAO found that over the five years, most of the 4,600 suspensions and disbarments came from five federal entities: the Defense Logistics Agency, the Navy, General Services Administration, Department of Homeland Security and Immigration and Customs Enforcement.

Others have ineffective programs, according to the report.

“They lacked the three attributes that we specifically found at the agencies with active programs. They lacked the dedicated staff, the policies and procedures and the active referral process,” GAO acquisition and sourcing management director Bill Woods told the subcommittee.

He added that agencies with the most active suspension and debarment programs had gone beyond the governmentwide policies to spell out specific roles and responsibilities of suspension and debarment staff.

The Environmental Protection Agency, for example, has 17 full-time staff members dedicated to suspension and debarment issues. They meet regularly with EPA investigators to identify misconduct early.

Lankford asked Woods if that would be hard to replicate without a lot of resources.

“Some of the agencies complained to us that they’re not in a position to devote full-time people and they’re not in a position to hire people. But reassigning people, or carving out some part-time responsibility for even a small number of individuals, would have the kind of impact that you describe,” Woods answered.

The poorest performer in the report was the Department of Health and Human Services. It awarded over $80 billion in contracts and grants in the five years that GAO studied, but found no contractors acting badly enough to be suspended or disbarred.

However, it had acted against 29 grant recipients who had either embezzled money through submitting false invoices or fabricated data or research.

The agency’s low rate can be attributed to the fact that it tries to weed out bad actors before giving them money, Nancy Gunderson, HHS’ deputy assistant secretary for grants and acquisition policy and accountability, told the subcommittee.

“We do take contractor oversight very seriously, including the way in which we select and evaluate our contractors prior to award and the way we administer those contracts during performance,” she said. “We do see suspension and debarment as a tool in our tool box to manage concerns. None of the issues that we have had have risen to that level.”

But she said HHS would revise its policies in light of the report and would consider dedicating staff to suspension and debarment activities. She told the subcommittee to expect changes within three months.

The report also noted that the Interagency Suspension and Debarment Committee, a governmentwide coordinator, had no dedicated staff. When only half of the member agencies responded to a request for information, the committee was slow to hunt down the necessary statistics and compile a report to Congress, GAO said.

Woods recommended that the Office of Management and Budget issue a memo to all agencies outlining the qualities of an effective suspension and debarment program and urge them to cooperate with the interagency group.


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