Read the full report (CAP Action)
The federal government spends hundreds of billions of dollars every year contract- ing out government services ranging from the design and manufacture of sophisticated weapons systems to janitorial and maintenance work. Yet the review process to ensure that only responsible companies receive federal contracts is very weak, and too often the government contracts with companies with long track records of violating workplace laws. New analysis from the Center for American Progress Action Fund, or CAP Action, shows that contracting with companies with egregious records of workplace violations also frequently results in poor performance of government contracts.
Our analysis builds on a 2010 report from the Government Accountability Office, or GAO, which scrutinized the companies levied with the 50 largest workplace health and safety penalties and those that received the 50 largest wage-theft assessments between fiscal year 2005 and fiscal year 2009. The GAO investigation found that even after committing such violations, these companies frequently received new government contracts. CAP Action—reviewing the same universe of companies analyzed by the GAO—found that the companies with the worst records of harming workers were also often guilty of shortchanging taxpayers through poor performance on government contracts and similar business agreements in ways that defraud the government or otherwise provide a bad value for taxpayers.
Among the 28 companies that received the top workplace violations from FY 2005 to FY 2009 and subsequently received federal contracts, a total of seven companies—or 25 percent—also had significant performance problems.
These performance problems ranged from contractors submitting fraudulent billing statements to the federal government; to cost overruns, performance problems, and schedule delays during the development of major weapons systems that cost taxpayers billions of dollars; to contractors falsifying firearms safety test results for federal courthouse security guards; to an oil rig explosion that spilled millions of barrels of oil into the Gulf of Mexico.
Although the federal government does not provide data on the frequency of performance problems across all federal contractors for comparison, the fact that one in four contractors with persistent or egregious workplace violations subsequently provided bad value for the government signals a serious cause for concern.
Read the full report (CAP Action)