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Report: Labor Violations Don’t Stop Government Contracts

A recent study finds that nearly 30 percent of companies hit with the highest penalties for federal labor law violations from 2007 to 2012 were also federal contractors.

Mon December 16, 2013 - National Edition
Construction Equipment Guide


WASHINGTON (AP) - The federal government awards billions of dollars in contracts each year to companies that routinely violate safety, health and wage regulations, according to a report released Wednesday that calls for stricter measures to hold federal contractors accountable.

The study from Democratic leaders on the Senate Health, Education, Labor and Pensions Committee found that nearly 30 percent of companies hit with the highest penalties for federal labor law violations from 2007 to 2012 were also federal contractors.

The report identifies 49 federal contractors that paid $196 million in penalties for nearly 1,800 violations over the six-year period. The same contractors received more than $81 billion in taxpayer dollars in 2012.

"I fear we are all too often paying companies that fail to pay their workers what they have earned and that regularly subject those workers to unsafe working conditions," said Iowa Sen. Tom Harkin, who chairs the Senate HELP Committee and commissioned the report.

The U.S. government spends over $500 billion each year paying private companies for services ranging from weapons and construction to cleaning and security services. Federal spending for service work alone has tripled since 2000, from $99 billion to $307 billion.

Federal law generally requires government contract officers to assess a company’s compliance with federal law before awarding a contract. Federal agencies can also suspend or bar contractors for certain behavior. But the report says government officials often lack the information needed to evaluate violations. A federal database that is supposed to keep track of contractor violations was found to be missing many incidents of misconduct, the report said.

For example, the Cincinnati-based uniform company Cintas Corp. was fined $2.5 million for a 2007 incident in which an employee was killed after being sucked into an industrial dryer. That incident is not in the federal database, and the company received $3.4 million in federal contracts in the 2012 fiscal year.

A spokeswoman for Cintas did not immediately respond to a request for comment.

The report calls for publication of an annual list of federal contractors that were assessed penalties or other sanctions. It recommends the Labor Department improve the quality of information it provides about violations.

The report also calls on President Barack Obama to sign an executive order that would require contract officers to consult with the Labor Department about violations when making decisions about contracting. It recommends another executive order to give contract officers more tools for making sure contractors comply with the law.

Steve Posner, spokesman for the Office of Management and Budget, said the Obama administration is committed to doing business with contractors "ho place a premium on integrity and good business ethics."

"We have taken aggressive steps to hold contractors accountable, including through the increased use of suspension and debarment actions against contractors who have violated federal laws, including wage and safety laws," Posner said.




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