Bad Actors Still Get Government Contracts
One of the checks on federal contractors who misbehave by repeatedly overcharging, failing to deliver and such is government blacklist of sorts genteely known as the Excluded Parties List System.
The idea is great. If you mess up and take advantage of the taxpayers in a fraudulent or egregious manner, you get suspended or disbarred. You earn a place on the list. And that is supposed to mean you can't get federal contracts.
If only it were that simple.
A new review by the Government Accountability Office found that such companies often find a way to sidestep the prohibitions. That's in part because the list, run by the GSA, is poorly managed.
Details about the findings came out at a hearing led by Rep. Edolphus Towns, chairman of the Committee on Oversight and Government Reform.
Examples from the audit include:
"In July 2005, the Department of the Army debarred a German company and its president after the president violated German law and attempted to ship dual use aluminum tubes, which can be used to develop nuclear weapons, to North Korea. In the debarment decision, the Army stated that because the president 'sold potential nuclear bomb making materials to a well-known enemy of the United States,' there was a 'compelling interest to discontinue any business with this morally bankrupt individual.' Despite this debarment, the Army chose to continue to award the company task orders and paid it over $4 million during fiscal year 2006."
"The Department of Health and Human Services (HHS) debarred an individual in April 2003 for 5 years after he pleaded guilty to Medicare fraud. Because HHS did not debar the individual's company, he transferred ownership of the company to his wife in an attempt to continue receiving Medicare reimbursements. After HHS objected to this arrangement, he then sold the company to a neighbor. Two years later, citing financial difficulties, the neighbor sold the business back to the original owner's wife. The wife admitted to our investigators that she then legally changed her last name to her maiden name to avoid "difficulties" in using her husband's name. Using this scheme, the couple received Medicare payments for the remaining 3 years of the husband's debarment."
The GAO had this to say about their findings:
"Most of the improper contracts and payments we identified can be attributed to ineffective management of the EPLS database or to control weaknesses at both excluding and procuring agencies. Our cases and analyses of EPLS data demonstrate that no single agency is proactively monitoring the content or function of the database."
Oh, the shame of it.
Here's a link to testimony delivered at the hearing about the GAO report.
By Robert O'Harrow |
February 27, 2009; 9:46 AM ET
Procurement Debate
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Posted by: attack_of_the_pod_people | February 27, 2009 12:18 PM
OMG - and Gee Whiz....does this include Haliburton and KBR...weren't they just punished for billions in bribery (oil contracts in Nigeria)?
I'm a tax payer and next to Cheney's alma mater, the rest are small potatoes.
Posted by: free-donny | February 27, 2009 12:25 PM
Fraud is Fraud. It is obvious that in the case of the medicare fraud they have the woman actually changing her name in the end to circumvent the debarrment.
WHY ARE THESE PEOPLE NOT IN JAIL ?????
Posted by: rpa777 | March 2, 2009 11:30 AM
Fraud is not punished if the person committing the fraud works for the federal government. In November, I gave the FBI a false statement made by an employee of the U.S. Geological Survey under oath to the Merit System Protection Board and documents showing that they did not contain the information that the employee had sworn they contained. The result was an immediate letter saying that my complaint would not be investigated. This perjury was part of a long series of felonies committed by federal employees in appeals before the Merit System Protection Board, none of which were investigated. The federal government does manage to maintain effective blacklists against only one group of persons: whistleblowers. Larcenous contractors and their friends in the federal agencies that are supposed to be monitoring them are completely safe and free to continue their fraud. Whistleblowers who report criminal actions in government will never work again. For many years, millions of average Americans have ignored this problem as something that did not concern them. Now, they are paying the price as their jobs and pensions disappear, and massive debt is being passed on to their grandchildren to "bail out" the corrupt beneficiaries of a corrupt government.
Posted by: cwheckman | March 2, 2009 3:10 PM
Yeh, everybody complains, but it always business as usual. Read this morning's headline: Richard Madoff's wife is declaring that the $ 69 million that is in her name belongs to her and is not part of the $ 50 BILLION Ponzi deal where he ripped off alot of people. Now that is called chupztha. You know those crooks will get away with this dodge.
Posted by: Raylene | March 3, 2009 12:40 PM
wELL "the farmbill" ...fARMERS HAVE long gone dyed...BUT HTERE fAMILIE still cashing THE "checks" AND CONGRESS IS NOT MAKING THEM PAY BACK THAT money...bUT THE FAMILIES HAVE NAMES LIKE ROCKEFELLER, WAL-MART ETC. CHEcK IT OUT 2008 farmbill WITH 1400 farmers LIVING IN MANHATTAN!
Posted by: sigup | March 4, 2009 1:43 PM
The first thing that come to MY mind is 'Blackwater' changing their name to 'XE' and their founder 'stepping down'. I personally wonder if this will allow them to circumvent debarring? It has been made public that this event has occurred. However, the way the process works, it IS entirely possible that 'XE' could be awarded future government contracts since 'Blackwater' officially no longer exists.
Posted by: dlsoops | March 4, 2009 3:57 PM
The comments to this entry are closed.
So you are saying if it wasn't for Congressman Towns, we wouldn't know about yet another way the taxpayer is being screwed?
At least there is one person in Congress trying to make sure our money is looked after.