House passes bill to check contractors' taxes

The House has passed a measure to deal with government  contractors' tax delinquency. Meanwhile, regulators are already close to finalizing changes in acquisition regulations to deal with the issue.

The Contracting and Tax Accountability Act, which the House passed by voice vote April 14, would prohibit a company with seriously delinquent tax debt from receiving a federal contract. It would require the potential contractor to certify it has no such debt and authorize the government to disclose the information to other agencies.

Rep. Brad Ellsworth (D-Ind.) introduced the measure Dec. 19, but acquisition regulators had nearly nine months earlier proposed a change to the Federal Acquisition Regulation to achieve the same result.

The Civilian Agency Acquisition and Defense Acquisition Regulations councils proposed the rule in the March 30, 2007, edition of the Federal Register. The proposal would require contractors to certify — among other things — if they had delinquent taxes, had failed to pay taxes or had received notice of a tax lien against them. Also, if a contractor told the government it had had problems with taxes during the previous three years, an agency could suspend or debar the company from government work.

The certifications would help agencies make informed decisions about awarding government work to contractors, the notice states.

So far, the proposed rule has cleared legal reviews and received approval from the Office of Federal Procurement Policy. In February, officials were preparing it for the federal acquisition circular, according to a status sheet on open FAR cases.

Republicans said they agree with the intent of Ellsworth’s bill but questioned why Congress is taking on issues already being handled by regulators.

“It is unclear to us whether this legislation is necessary,” said Rep. Virginia Foxx (R-N.C.).

The bill has been referred to the Senate.

About the Author

Matthew Weigelt is a freelance journalist who writes about acquisition and procurement.

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