CACI Faces New Probe Of Contract
Federal laws require agencies to award contracts to companies that have records of integrity and business ethics. Contracting officers must consider criminal, civil or administrative violations or complaints in deciding whether to ban a company from federal work.
"When the government's overhead agency says [a contract can be used] to buy apples and oranges, you can't say, 'Oh, we'd like to buy a chair,' " said Daniel J. Guttman, a fellow at the Center for the Study of American Government at Johns Hopkins University. "Technically that's against the law. . . . It's basically a blatant avoidance of the competitive process."
Other experts said contractors and agencies commonly ignored such restrictions and, until now, such violations got little attention.
"This is an issue that comes up all the time and it frankly makes government contractors uncomfortable. If your customer comes to you and says they want to buy something, you're not going to say you won't sell it to them," said Terry L. Albertson, a lawyer with Crowell & Moring LLP who specializes in government contracts.
Philip Finnegan, director of corporate analysis with the Teal Group Corp., a consulting firm in Fairfax, said that in the past it would be rare for a company to be barred for such a violation. "But nonetheless this investigation and this announcement create a lot of uncertainty about the company," he said.
Brett B. Lambert, executive vice president of DFI International Inc., a defense consulting and research firm, predicted that only a part of the company would be barred from government work if the GSA takes action. He said that is unlikely given how such incidents have been handled in the past.
WorldCom Inc. (now MCI Inc.) wasn't hurt much when it was suspended from getting new federal contracts for five months last year after it admitted violations of accounting rules. During that period it still received contracts under a waiver.
CACI, which got 92 percent of its revenue from federal clients in 2003, has 6,300 employees, more than half of whom work in the Washington region.
Staff writer Renae Merle contributed to this report.
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