House passes bill to debar crooked contractors

The House unanimously passed legislation on Wednesday requiring the federal government to debar contractors caught bribing overseas government officials to win international business.

The 2010 Overseas Contractor Reform Act that Rep. Peter Welch, D-Vt., sponsored would require agencies to debar companies and individuals found in violation of the 1977 Foreign Corrupt Practices Act, and sever their existing government contracts and grants.

An agency head could issue a waiver to avoid debarring the contractor or grantee, after notifying Congress and justifying the decision.

"Contractors that bribe foreign governments have absolutely no business profiting off the American taxpayer," Welch said. "Those who violate the rule of law undermine not only our nation's mission and values, but also the safety of our troops."

The legislation was prompted by media reports last year that private security contractor Blackwater Worldwide, now known as Xe Services LLC, had authorized secret payments to Iraqi officials to prevent Iraq from revoking its license to operate in the country. Blackwater was under heavy scrutiny by the Iraqi government after guards reportedly opened fire three years ago in a crowded square, killing 17 civilians and injuring dozens more.

"This law puts contractors like Blackwater on notice that bribery and corruption simply will not be tolerated," Welch said. Xe has not been charged with violating the FCPA.

The language of the bill, however, could offer some wiggle room for contractors charged with bribing international officials.

During the past few years some of the largest federal contractors, including BAE Systems and Halliburton, have paid multimillion-dollar settlements to resolve FCPA allegations, and they have not faced suspension or debarment, in part because of carefully crafted settlement agreements with the Justice Department that allowed them to admit wrongdoing, but not necessarily confess to bribery.

BAE, for example, admitted to conspiring to defraud the United States and making false statements about its FCPA compliance program.

The Federal Acquisition Regulation states companies can be suspended or debarred for an "offense indicating a lack of business integrity or business honesty that seriously and directly affects the present responsibility of a government contractor or subcontractor." The FAR does not specifically mention FCPA breaches, but federal guidelines state a person or firm found in violation -- or even indicted -- for an FCPA offense can be banned from doing business with the government.

The bill now moves to the Senate, where there is no companion measure.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
Close [ x ] More from GovExec

Thank you for subscribing to newsletters from
We think these reports might interest you:

  • Sponsored by G Suite

    Cross-Agency Teamwork, Anytime and Anywhere

    Dan McCrae, director of IT service delivery division, National Oceanic and Atmospheric Administration (NOAA)

  • Data-Centric Security vs. Database-Level Security

    Database-level encryption had its origins in the 1990s and early 2000s in response to very basic risks which largely revolved around the theft of servers, backup tapes and other physical-layer assets. As noted in Verizon’s 2014, Data Breach Investigations Report (DBIR)1, threats today are far more advanced and dangerous.

  • Federal IT Applications: Assessing Government's Core Drivers

    In order to better understand the current state of external and internal-facing agency workplace applications, Government Business Council (GBC) and Riverbed undertook an in-depth research study of federal employees. Overall, survey findings indicate that federal IT applications still face a gamut of challenges with regard to quality, reliability, and performance management.

  • PIV- I And Multifactor Authentication: The Best Defense for Federal Government Contractors

    This white paper explores NIST SP 800-171 and why compliance is critical to federal government contractors, especially those that work with the Department of Defense, as well as how leveraging PIV-I credentialing with multifactor authentication can be used as a defense against cyberattacks

  • Toward A More Innovative Government

    This research study aims to understand how state and local leaders regard their agency’s innovation efforts and what they are doing to overcome the challenges they face in successfully implementing these efforts.

  • From Volume to Value: UK’s NHS Digital Provides U.S. Healthcare Agencies A Roadmap For Value-Based Payment Models

    The U.S. healthcare industry is rapidly moving away from traditional fee-for-service models and towards value-based purchasing that reimburses physicians for quality of care in place of frequency of care.

  • GBC Flash Poll: Is Your Agency Safe?

    Federal leaders weigh in on the state of information security


When you download a report, your information may be shared with the underwriters of that document.