Obama warns contractors: Report ARRA money or else

The president says contractors failing to report information must be held accountable by all agencies to the fullest extent of the law

In a memo, President Barack Obama today told agencies to intensify their pressure on contractors to file reports on how they're using money from the economic stimulus law.

For contractors who don’t file reports on their use of that money, agencies should consider ending the contract, and work to suspend or debar those companies from getting any more government contracts. If necessary, agencies should even initiate punitive actions, according to the memo.

“Any prime recipient that has failed to report is not living up to the standards set by my administration and must be held accountable by all agencies to the fullest extent permitted by law,” Obama wrote in the memo.

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Contractors are required to file how much money they have received and spent, a list of projects funded by the money, including location and expected completion date, and the jobs associated with each project. They are to submit the information at FederalReporting.gov.

Obama also wants agencies to notify authorities quickly about contractors that don’t comply with the rules. Agency officials are to report the identities of non-compliant prime contractors to the Office of Management and Budget, specifying how they responded to each instance of noncompliance, the memo states.

Obama told OMB to review its own guidelines on what agencies are responsible for when faced with a non-compliant contractor. The new guidance may include new ways to get companies to file their reports, the memo states.

“My administration is committed to transparency in tracking recovery dollars and to elimination of waste, fraud, and abuse by recipients of hard-earned taxpayer dollars,” Obama wrote.

On the same topic, Vice President Joe Biden this morning visited Recovery Accountability and Transparency Board Chairman Earl Devaney and the twelve inspectors general who make up the board to discuss the memo and inspect the board’s fraud detection center.

“We are here to send an unambiguous message that not reporting is not acceptable,” Biden said during the meeting. “These are public funds, taxpayer funds.”

Biden also said he hopes the law's reporting requirements would become a template for future spending programs.

About the Author

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

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Reader comments

Sat, Jun 26, 2010 Shanon Texas

I a true believer in the Obama administration but I also paid the price for whistleblowing on mis-use of ARRA funds. It's one thing to ask people to become involved in reporting abuses but should that always come at such a high price. While I won my unemployment after reporting (and being terminated) I am still just as unemployed and with pre-existing conditions the likelihood of significant new employment is doubtful. I would do it again in a heartbeat because it was right but the company I worked for should have received something other than a slap on the wrist.

Wed, Apr 7, 2010 Terry Colson Newnan, GA

We should also hold government entities responsible for keeping stimulus dollars in the US to stimulate the US economy. Transit authorities are awarding contracts funded by ARRA dollars to Canadian and German companies even though there are viable USA vendors. To make matters worse, most of them even have a Buy American requirement in their requests for proposal. If Obama is going to require the contractors to report how the money is spent, he should also require the government agencies to report where the money went. Your US tax dollars are at work in Canada.

Wed, Apr 7, 2010

Should not it be the Government agency that is allocating the funds do the reporting. After all, should not that agency know the how much, what, where, who as well as the why of the money being spent? Why load up the private businesses on extra paperwork which main purpose is used to politically glorify the program? The agency doling out the money should be on the lookout for fraud. The agency should be held responsible to see that the money is responsibly spent. Or is it that the Government agencies are the ones that cannot track these things properly or see that the money is properly spent? If that is the case, then the money should not be in the hands of the government at all.

Wed, Apr 7, 2010 Anon Fed Wash DC

In the case of stimulas funds distributed through grant programs, one should consider that the RAT board and OMB in general has sent literally dozens of revised instructions on what to report, how to report and when. Many recipients have been unable to hit the moving target or have not executed the grant agreements until they understood the strings attached to the money. Others have spent large sums of money to revise automated reporting systems only to find the standards are subsequently changed in a way that their work has been for naught. Some have even attempted to return the funds because the reporting requirements exceeded their capacity to comply in the alloted reporting periods. This has not been easy for grantees or the grant making agencies and the transparency team has not helped the matter with their constant revisions to the reporting guidance.

Wed, Apr 7, 2010 Deborah

How about holding the SBA resposible for billions of dollars in small business contracts being diverted to large corporations, illegally????

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