Lawmakers renew push to tighten contractor ethics standards

A bipartisan group of lawmakers on Thursday introduced legislation that would make it easier for agencies to locate companies with histories of misbehavior and bar them from federal contracting work.

The 2003 Contractors Accountability Act (H.R. 2767), sponsored by Rep. Carolyn Maloney, D-N.Y., and six other members of Congress-including presidential hopeful Dennis Kucinich, D-Ohio-calls on the General Services Administration to maintain a central database with records dating back five years of any court or administrative proceedings brought against federal contractors, and any resulting debarments or suspensions.

Maloney has introduced similar legislation several times, most recently as an amendment to the 2003 Services Acquisition Reform Act (H.R. 1837). In early May, the House Government Reform Committee defeated the amendment by a vote of 22 to 18.

But Maloney's aides believe the latest legislation stands a better chance of passage. A recent proposal to bar bankrupt telecommunications giant MCI from federal work for a year has brought increased attention to the issue of contractor responsibility, a Maloney aide said. Maloney's bill enjoys bipartisan support, said Afshin Mohamadi, one of her spokesmen.

Federal agencies can suspend or debar contractors for various types of misconduct, including fraud, embezzlement and forgery. The Federal Acquisition Regulation also allows agencies to bar contractors from future work for breaching the terms of an agreement, either intentionally or by accident. Suspension is temporary, while debarment lasts for "a reasonable period" that is usually less than three years.

Currently, GSA maintains a database of contractors excluded from government work, but the database does not list recent litigation or administrative actions mounted against companies still permitted to work for federal agencies. Larger government contractors are rarely debarred or suspended, according to the Project on Government Oversight (POGO), a nonprofit watchdog group. But many have still committed offenses that agencies ought to be aware of, the group contends.

POGO has maintained its own database to track lawsuits initiated against large contractors from 1990 through the end of 2002. The group claims that the 10 largest federal contractors accumulated 280 instances of misconduct or alleged misconduct in that time and paid more than $1.97 billion worth of fines, penalties, restitution, settlements and cleanup costs. But none of them were debarred or suspended from government work.

The database proposed in the pending Contractors Accountability Act would allow agency procurement officers to view a private company's recent history of misdeeds and legal wrangles before entering into an agreement with the company. Agency officials would also have permission to enter information about problems they have encountered with contractors directly into the database.

"The federal government should not be in the business of repeatedly awarding contracts to companies that repeatedly break the rules," Maloney said in a statement accompanying the release of her legislation. "At a bare minimum, they should be able to keep a list of those which break the rules."

But Alan Chvotkin, senior vice president and counsel for the Professional Services Council, an Arlington, Va.-based contractors association, said much of the information included in the proposed database would be useless to agencies, because it would involve minor offenses irrelevant to a company's ability to perform quality federal work.

Agency procurement officials can find similar information about contractors in other places if they are truly interested, Chvotkin said. For instance, the Past Performance Information Retrieval System, maintained by the Defense Department, contains data on how well companies have lived up to the terms in their past contracts with the government.

Under the new legislation, contractors would be deemed "nonresponsible" if convicted of two offenses worthy of debarment or suspension within a three-year period. To change this designation, a contractor would have to present "clear and convincing evidence" of steps taken to "correct the conditions that gave rise to the violations." Agencies would reserve the right to ban contractors remaining on the "nonresponsible" list from government work.

Contractors should be held to a high standard of performance when "dealing with a federal taxpayer environment," Chvotkin said. But he said it's wrong to blacklist companies for a pattern of misdeeds, many of which may not impact their ability to perform federal work. Chvotkin also said he is concerned that the new legislation shoulders companies with the burden of removing themselves from the "nonresponsible" list.

But according to one of Maloney's aides, the legislation levels the playing field for agencies that do not have the resources-or any incentive-to initiate legal action against contractors. A provision in the bill would allow agencies to keep fines or settlements won from contractors, as long as they use the money to enforce the terms of the settlements or to help maintain GSA's central database of contractor misdeeds.