Little consequence for companies that cheat the US government 

When Boeing was caught red-handed in 2003 cheating on its bid for a lucrative Air Force deal, you might have expected the federal government to punish the giant defense contractor to send a message that such  dishonest behavior is not tolerated.

Likewise, when the multinational engineering firm Fluor was caught overcharging Uncle Sam — in cases serious enough to warrant $11.7 million in fines — it should be safe to assume that Fluor was dropped on the list of companies the government would turn to for future work.

Actually, neither company has suffered a bit for past indiscretions. Boeing, Fluor and a host of other companies with mile-long rap sheets are still among the biggest federal contractors. For large corporations, fines — even those in the millions of dollars —  are nothing more than a cost of doing business, especially if the fines do not disqualify them from future government deals.

So, it came as no surprise to us at the Project on Government Oversight when the Department of Defense reported in January that it had awarded more than $270 billion in contracts to companies previously found guilty of fraud.

All anyone had to do was consult our Federal Contractor Misconduct Database, which shows that the top 100-plus federal contractors, several of which the Pentagon cited in its report, have racked up more than $20 billion in fines, penalties, and restitution in hundreds of instances of fraud and other kinds of misbehavior since 1995.

Very few of these contractors have ever been barred from federal contracting for breaking the law or performing poorly on a contract. Our government has become too dependent on the Boeings, Lockheed Martins and General Electrics.

Just look at last year’s massive oil spill in the Gulf of Mexico. There was talk about barring BP. But the Pentagon interceded on BP’s behalf because BP, after all, is a main supplier of fuel to U.S. military operations in Iraq and Afghanistan.

That’s why it’s somewhat frustrating when the federal government fumbles something as important as the soon to be launched Federal Awardee Performance and Integrity Information System.

While the government plans to make some information about contractor misconduct available online beginning April 15, pressure from industry groups helped keep certain data on past performance hidden from public view.

The federal government needs far greater transparency in the area of contracts and procurement. When contractors cheat the government or perform poorly, that information should be available to all online.

Danielle Brian is the executive director of the Project On Government Oversight, www.pogo.org.

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Danielle Brian

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