GAO: Contractors get federal business despite violations

By Joe Davidson
Washington Post Staff Writer
Wednesday, October 13, 2010; 11:31 PM

When Uncle Sam dishes out billions of dollars in contracts to companies doing the government's work, you'd think he'd want to deal with firms that don't break his laws.

But a Government Accountability Office report says numerous contractors received government business even after they had been cited for violating laws designed to protect workers.

Consider this example:

The Labor Department's Occupational Safety and Health Administration (OSHA) hit a large petroleum company with $55 million in fines for labor law violations between fiscal 2005 and 2009.

A big chunk of the fines followed health and safety inspections "after a massive refinery explosion where there were 15 deaths and almost 200 injuries," GAO reported.

Yet in 2009, Sam awarded the firm's parent company more than $2 billion worth of work.

Perhaps he wanted to make sure it had enough money to pay the fines.

Here's another case:

Upon finding violations in a sugar refinery in 2008, OSHA said the company should pay $8.7 million in fines. Of the total, $5 million was related to a refinery factory explosion that killed 14 people and injured many more.

Then this: "The federal government obligated about $6.5 million on federal contracts with this firm during fiscal year 2009," said the report, signed by Gregory D. Kutz, managing director of forensic audits and special investigations for GAO.

Sam continues giving work to the violators, despite requirements that contractors be "responsible" and have "a satisfactory record of integrity and business ethics."

GAO found that 20 federal contractors were among companies that Labor cited for wage-and-hour violations. These contractors were told to pay more than $80 million in back wages.

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