When Lockheed Martin got caught red-handed three years in a row for committing fraud on government contracts, you might have expected the federal government to punish the giant defense contractor to send a message that such dishonest behavior will not be tolerated.
Likewise, when the multi-national engineering and construction firm KBR racked up six instances of contract fraud for which it paid nearly $59 million in fines and penalties, it should be safe to assume that KBR was dropped from the list of companies the government would turn to for future work.
Yet neither company has suffered a bit for past indiscretions. Lockheed, KBR, and a host of other companies with mile-long rap sheets, are still among the government’s top vendors. For large corporations, fines—even those in the millions of dollars—are nothing more than the 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 (POGO) when the Department of Defense reported in January that it had awarded more than $270 billion in contracts to companies 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 of the world.
Just look at last year’s massive oil spill in the Gulf of Mexico. There was talk about debarring BP, but the Pentagon interceded because BP is the main supplier of fuel to U.S. military operations in Iraq and Afghanistan.
That’s why it’s somewhat frustrating when the federal government holds back on something as important as the soon to be launched Federal Awardee Performance and Integrity Information System (FAPIIS) public website.
While the government plans to make some information about contractor performance and responsibility available online via FAPIIS beginning April 15, it will still keep certain data on past performance hidden from public view.
This is a major shortcoming. The federal government needs far greater transparency in the area of federal contracting, given that the government spends more than $535 billion each year on goods and services.
When contractors cheat the government or perform poorly, that information should be made publicly available online, similar to the way ordinary consumers post their reviews of products and services. Information about contractor misconduct is often inaccurate, out of date, or is never shared between federal agencies, much less with the general public. That means past misdeeds are often not considered when agencies are making contract award decisions.
FAPIIS can still be a powerful tool but only if it includes more information, not less. Unfortunately, there’s still a culture of secrecy in government agencies that must be overcome if the Obama administration wants to live up to its promises of increased transparency.
Calendars of top-level officials, agency visitor logs, and agency communications with Congress all help the public understand how their government operates and foster an informed citizenry. Unfortunately, much of that basic information, just like contractor past performance information, or details of the actual contracts, remains off-limits.
As the White House and Congress move forward with a variety of open government initiatives, it’s important to remember that these efforts will ring hollow unless government loosens it grip on the kind of information that the public needs to hold its leaders accountable.
Danielle Brian is the executive director of the Project On Government Oversight.
