Clean Contracting Recommendations for Post-Katrina Reconstruction:We should not allow Katrina to become "a hurricane for the poor, and a windfall for the rich," as Jesse Jackson, Jr. put it. See our other Katrina page for information about the contracts.
Congress and the administration must ensure that taxpayer money is spent wisely and responsibly, and not on well-connected contractors with a history of waste, fraud and other abuses. At a minimum, the following policies should be applied to all related contracts.:
1) Hire only responsible contractors.
-- A) Prohibit companies that have committed fraud or other contract-related violations in Iraq or elsewhere in recent years; (more)
For related legislation, see the "Contractors Accountability Act of 2003" introduced by Rep. Maloney (D-NY); also see Rep. Sherrod Brown's 2004 "Accountability and Responsibility in Contracting Act"). And to learn more about contractor accountability, go HERE.
-- B) Prohibit companies that don't pay their fair share of taxes. E.g. companies that 'reincorporated offshore to avoid paying their fair share of taxes (this provision already applies to DHS contracts as a result of provisions passed in 2004, but should be extended to all federal contracts), and which owe back-taxes to the government should be ineligible. Go here to learn more.
2) Improve Transparency and Oversight
a) Post the contracts online. All contracts, subcontracts, task and delivery orders and other forms of federal disbursement should be posted online in a transparent manner to ensure taxpayer dollars are spent in a transparent and accountable manner. (E.g. all contractors should be required to disclose their subcontractors.) Access should be free to the public and the database should be managed by the GSA or another federal agency. For suggested language, go here.
"Groups push for online access to details of federal contracts" (Govexec.com, 5/17/02)
GSA federal register notice regarding putting contracts online
GSA federal register notice about putting contracts online (pilot program)
Open the Government (OMB Watch)
b) Create a publicly-accessible database of contractors' track records and compliance history should be established to help contracting officials protect taxpayers by enforcing these and other "responsible contractor" requirements of Federal Acquisition Regulations. A similar proposal was passed by the Senate in the 2006 Defense Appropriations bill.
3) Crack Down on Cronyism: -- The "cooling-off" period for ex-employees who work for federal agencies involved in Katrina contracts should be extended to one to more years, and loopholes that allow ex-government employees to work for different divisions within a contracting company should be closed. (A similar bill was introduced by Senator Levin for ex-bank examiners. See related release.) Companies that have close ties to contracting agency officials department heads or cabinet-level officials should not be eligible for no-bid contracts.4) Increase competition. Competitive bidding should be required for any and all non-emergency purchases. All prime contractors should be required to transparently and competitively bid any subcontracted work (and post all subcontracts on a government web site). No work should be outsourced that the government is able to do itself.
5) Whistleblower protections should be strengthened for federal contractor and subcontractor employees.
6) Help the communities most impacted. The order suspending prevailing wage provisions for contracts should be reversed. Prevailing wage provisions should apply to all contracts and subcontracts. In addition, preference should be given to contractors that hire a quarter of the workforce from individuals who were displaced or who lost jobs as a result of the disaster. Reports suggest 90% of the first contracts went to companies outside of the region, and that minority firms are being shut out. (See S 1644, the "Hurricane Katrina Reconstruction and Displaced Worker Assistance Act of 2005").
7) Include a bounty provision to allow taxpayers to recover money lost through fraud. For specific language, go here.
8) Require a performance bond For suggested language go here.
For more information:
37 Geo. Wash. Int'l L. Rev. 51
9) Contractor Fairness No contracts should be let out if private contractor cost benefit is based on lower wages/benefits. Govt employees must be given right to compete for jobs before turned over to private contractors.
Rep. Chris Van Hollen (D-MD) introduced related legislation, the Federal Employees with Disabilities Protection Act (H.R. 1480).See AFSCME and AFGE to learn more about this issue.
For more ideas on responsible contracting see:
Project on Government Oversight