Defense Agencies Continue Awarding Contracts to Suspended Firms, Report Finds

At least nine major contractors, working primarily for defense-related agencies, have benefited from waivers under a 1981 law that allows federal officials to override the firms’ suspensions for such misconduct as fraud, bribery and theft.

That’s according to a new study of 22 contract decisions released this week by Bloomberg Government. Using a Freedom of Information Act request filed with the General Services Administration, the publication also found that some agencies had failed to forward the required documentation on the waivers to GSA.

Such household names as IBM, BP and Boeing have benefited from the law, wrote reporter Sam Skolnik.

The overall trend in agency suspensions and debarments of faulty contractors has been downward, in part because some of the military agencies cited by Bloomberg cited “life and death” and “compelling needs” for quick awards for use in war zones.

“Companies receiving waivers included some accused or convicted of major fraud, wire fraud, conspiracy, ethical bidding violations, and in the case of fuel-seller BP, an overall ‘lack of business integrity,’” Bloomberg wrote.

The nine that received waivers over the past 15 years, according to data from GSA and the Government Accountability Office, include S.K. Engineering and Construction Co.; Supreme Foodservice FZE; Unity Kabul Logistics and Supply Services; State Corps. Ltd.; Air BP Ltd.; Agility Public Warehousing Co; International Business Machines Corp.; National Air Cargo Holdings Inc.; and Boeing.

The agencies issuing waivers included the Army (16), the Defense Logistics Agency (9) the Air Force (4), and the National Geospatial Intelligence Agency (1).

GSA is required to post such waivers on its website.

The issue of faulty contractors continuing to win business is one of those tracked by the nonprofit Project on Government Oversight. “The law is not being properly enforced, and there’s a definite lack of transparency,” Neil Gordon, a POGO investigator, told Bloomberg Government. “These are risky companies accused of serious crimes. It’s a real problem.”

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