Contractors behaving badly: Report exposes labor law violations by IT vendors

GAO says government has awarded contracts to several companies with large labor, wage regulatory violations

The government awarded billions of dollars in contracts in fiscal 2009 to companies that violated wage, labor, and safety regulations, according to a new report.

Government Accountability Office auditors found that one-half of the 50 largest assessments handed out by the Labor Department’s Wage and Hour Division between fiscal 2005 and 2009 were charged to 20 federal contractors. WHD, which enforces federal minimum wage, overtime pay and child labor requirements, assessed these contractors for more than $80 million in back wages, according to GAO.

And in fiscal 2009, the government awarded those 20 companies more than $9 billion in contracts. None were suspended or debarred as a result of their actions.

GAO also investigated 15 federal contractors cited for violating federal labor laws enforced by WHD, as well as regulations from the Occupational Safety and Health Administration (OSHA) and the National Labor Relations Board. The federal government awarded these 15 federal contractors more than $6 billion in contract obligations during fiscal 2009, the report states.


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There are more instances of contractors that have violated wage, labor and safety regulations receiving federal contracts, although GAO could not get a full picture.

Because OSHA and WHD databases do not contain Data Universal Numbering System figures that identify contractors, GAO’s analysis was limited to the 50 largest WHD assessments and OSHA penalties.

The Federal Acquisition Regulation requires contracting officers to choose responsible companies for federal work. But GAO auditors said they did know the extent to which contracting officers considered OSHA fines in awarding federal contracts.

GAO also added that most private-sector firms abide by these regulations.

Some members of Congress have expressed concerns that government contractors are not adhering to federal labor and wage regulations, which are meant to ensure that employees receive proper pay and notice of work-site hazards and also the right to bargain collectively. That concern prompted GAO’s investigation.

 

About the Author

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

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