Most federal agencies aren’t doing enough to monitor contractor fraud, according to a new report by the Government Accountability Office (GAO).
The GAO analyzed the number of suspensions and debarments imposed under the Federal Acquisition Regulation of 10 major contracting agencies over five fiscal years. Only a handful of agencies punished contractors for fraud. The most active agencies were the Defense Logistics Agency, the Navy, the General Services Administration and Homeland Security Department’s Immigration and Customs Enforcement.
The agencies who did not punish contractors included the Commerce, Health and Human Services, Justice, State and Treasury departments, as well as the Federal Emergency Management Agency.
The Health and Human Services Department was the poorest at identifying contractor fraud. It awarded more than $80 billion in contracts and grants in five years, but found no contractors acting badly enough to be suspended or disbarred. However, it performed other disciplinary actions against 29 grant recipients who had either embezzled money through submitting false invoices or fabricated data or research.
“Common sense would seem to suggest these agencies are not looking for and thus not uncovering fraud on the part of their contractors,” said Rep. James Lankford (R-Okla.). “In some cases, though, these agencies may simply accept poor performance or staff may not complete the file of paperwork or help others avoid the same bad contractors in the future,” The Defense Department has the highest number of suspensions and debarments, at 1,616 over five years. However, when viewed as a percentage of contracting dollars, the Environmental Protection Agency has a far higher rate.
“Agencies that fail to devote sufficient attention to suspension and debarment issues likely will continue to have limited levels of activity and risk fostering a perception that they are not serious about holding the entities they deal with accountable,” said William Woods, director of acquisition and sourcing management at the GAO.
The report does not recommend any new legislation on suspensions and debarments, but calls for the agencies deemed inactive to mimic the organizational approaches of the active ones. This entails assigning full-time dedicated staff and resources to monitor contracts, developing detailed implementation guidance and promoting a case referral process.
The GAO also recommends that the Office of Federal Procurement Policy issue guidance to federal agencies to ensure they are aware of the elements of an active suspension and debarment program and the importance of cooperating with the Interagency Suspension and Debarment Committee.
