President Bush Signs Law Creating Contractor Responsibility Database

For Immediate Release

Contact: 

Marthena Cowart or Neil Gordon (202) 347-1122

Project on Government Oversight (POGO)

President Bush Signs Law Creating Contractor Responsibility Database

POGO's Database Extended to Top 100 Contractors

WASHINGTON - Yesterday afternoon, President Bush signed
into law the Fiscal Year 2009 National Defense Authorization Act (S.
3001), which includes a provision to establish a database of
information regarding the integrity and performance of federal
contractors and grantees.  Coinciding with the signing of the new law,
the Project On Government Oversight (POGO) is announcing the release of
its updated Federal Contractor Misconduct Database (FCMD) www.contractormisconduct.org
The government database is modeled after POGO's database, which was
originally released in 2002. However, the new government database will
not be accessible to the public.

POGO's
updated FCMD features various format changes, new search and sort
features, and an expanded list of contractors that now includes the top
100 federal contractors.  The FCMD now includes over 750 instances of
misconduct including fraud, antitrust, environmental, securities and
labor law violations since 1995. With 47 instances, Lockheed Martin
remains the company with the most instances of misconduct. Exxon Mobil
and General Electric leapt to the 2nd and 3rd
slots, with 32 and 30 instances respectively, beating out Boeing and
Northrop Grumman, which held those positions in POGO's FCMD last year.

"POGO
applauds the government database as a positive step toward greater
contractor accountability, even though it will be less comprehensive
than POGO's Federal Contractor Misconduct Database and, more
importantly, it is not accessible to the public," said Scott Amey, POGO
General Counsel.

Equally
important to note in the FCMD is that 25 of the top 100 contractors do
not have any known instances of misconduct in the database. The fact
that one quarter of the government's top 100 contractors have no known
instances of misconduct belies the myth that any company big enough to
do business with the government will inevitably have multiple instances
of wrongdoing. Additionally, 14 of the contractors only have one
instance in the database, which means that 39 of the top 100 government
contractors do not show a pattern of misconduct.

POGO has also compiled the most common myths surrounding a federal contractor misconduct database.
Critics of contractor accountability have provided false impressions
about our intent and the current state of government contracting.

The
National Defense Authorization Act mandates that within the next year,
the Office of Management and Budget and General Services Administration
design and maintain a federal contractor responsibility database for
recipients of federal contracts and grants of over $500,000. The
government-wide database will include civil, criminal, and
administrative misconduct pertaining to the award or performance of a
state or federal contract or grant for the most recent five-year period.

Federal
acquisition rules require that the hundreds of billions of taxpayer
dollars awarded every year in contracts go to companies that are
presently "responsible." Currently, the government does not adequately
define "responsibility" to include a company's total record of
responsibility, integrity, and performance. Government contracting
officers must have at their disposal as much information as possible
about the backgrounds of prospective vendors in order to make decisions
that are in the best interest of the public to curb waste, fraud, and
abuse.

Some disturbing examples from POGO's new FCMD include:

KBR
-- An audit report by the Department of Defense Inspector General found
that the Navy paid approximately $4.1 million for meals and services
that should have cost $1.7 million, and inappropriately paid a markup
on material and equipment that cost an additional $7.2 million. The
report recommended the Navy seek a $1.4 million refund from KBR for the
inappropriate payments.

United Technologies Corporation --
Pratt & Whitney (a division of UTC) and its subcontractor,PCC
Airfoils LLC, agreed to pay $52.3 million to the federal government to
resolve False Claims Act allegations that they knowingly sold defective
turbine blade replacements for engines used in F-15 and F-16 fighter
aircraft.

GlaxoSmithKline --
An Alabama state court jury found GlaxoSmithKline liable for
misrepresentation by overcharging the state Medicaid program for
medications. GlaxoSmithKline was ordered to pay the state $80.9
million.

IBM
-- IBM agreed to pay $20 million to settle a shareholders lawsuit that
claimed the company misled the public about employee stock-option
expenses in 2005.

POGO
applauds the leadership of Representative Carolyn Maloney (D-NY) as
well as the work of Representatives Henry Waxman (D-CA), Tom Davis
(R-VA), and Edolphus Towns (D-NY) and Senators Claire McCaskill (D-MO),
Barack Obama (D-IL), Carl Levin (D-MI), John McCain (R-AZ), and Hillary
Clinton (D-NY), who promoted improved contractor accountability.

 

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Founded in 1981, the Project On Government Oversight (POGO) is an independent nonprofit that investigates and exposes corruption and other misconduct in order to achieve a more accountable federal government.

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