President orders clampdown on tax-delinquent contractors

Memo directs federal officials and Congress to improve information sharing in order to block delinquent companies from receiving new awards

President Barack Obama today took some basic steps to hammer government contractors that are delinquent in paying their taxes.

In a memo the president signed this morning, Obama directed the Office of Management and Budget, the Treasury Department and other federal agencies to find ways to block companies that have not paid taxes from receiving new government contracts. He expects recommendations on how the government can do that in three months.

One way to do that is better data-sharing. The president wants a plan to make contractors' certifications on their taxes available in a governmentwide database, similar to the data exchanges already being done with other information on companies.

“All across this country, there are people who meet their obligations each and every day,” Obama said in a speech today before signing the memo. “And yet, somehow, it’s become standard practice in Washington to give contracts to companies that don’t pay their taxes.”

The president is also directing the IRS to conduct a review of the overall accuracy of companies’ claims about tax delinquency.

“We need to be sure that when a company says it’s paying taxes, that company is in fact paying taxes,” he said.

regulatory change to the Federal Acquisition Regulation in 2008 requires contractors to certify whether they had delinquent taxes, had failed to pay taxes or had received notice of a tax lien against them. In addition, an agency could suspend or debar the company from government work if a contractor told the government it had had problems with taxes during the previous three years.

In his speech, Obama asked Congress to approve legislation to allow data sharing between the IRS and contracting officials at agencies.

“So the steps I’m directing today and the steps I’m calling on Congress to take are just basic common-sense steps,” Obama said. “They’re not going to eliminate all the waste or all the abuse in government contracting in one fell swoop.”

About the Author

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

Featured

  • Cybersecurity

    DHS floats 'collective defense' model for cybersecurity

    Homeland Security Secretary Kirstjen Nielsen wants her department to have a more direct role in defending the private sector and critical infrastructure entities from cyberthreats.

  • Defense
    Defense Secretary James Mattis testifies at an April 12 hearing of the House Armed Services Committee.

    Mattis: Cloud deal not tailored for Amazon

    On Capitol Hill, Defense Secretary Jim Mattis sought to quell "rumors" that the Pentagon's planned single-award cloud acquisition was designed with Amazon Web Services in mind.

  • Census
    shutterstock image

    2020 Census to include citizenship question

    The Department of Commerce is breaking with recent practice and restoring a question about respondent citizenship last used in 1950, despite being urged not to by former Census directors and outside experts.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.