The Obama administration publicly advocates for fairness for working people, but it is not using the tools it has to protect workers on the job. Companies that regularly cheat their employees out of pay or provide unsafe working conditions are winning millions of dollars in federal contracts. There are rules already in place to hold contractors more accountable, but they are not being adequately enforced. A recent Senate committee report finds that even after paying millions of dollars in penalties for labor law violations, including preventable industrial accidents where workers have died, companies are awarded government business.
One of the more startling findings by Democrats on the Senate Health, Education, Labor and Pensions Committee is the lack of adequate controls to ensure that federal contractors comply with the law. In 2012, $81 billion in federal contracts were awarded to 49 federal contractors that had 1,776 separate enforcement actions against them, resulting in $196 million in penalties and back-wage assessments over the last six years. The violations range from disregard for Occupational Health and Safety Administration regulations to failing to pay workers for all the time they worked.
This shouldn't be happening. Federal law contains provisions intended to encourage good corporate behavior by leveraging the power of the federal purse. Contracting officers are supposed to evaluate whether a company is reasonably compliant with wage and hour laws, and health and safety requirements, before awarding a contract. There is also a process of debarment where federal agencies can suspend or end relationships with contractors that violate federal law. But the Senate investigation found that a database designed to give contracting officers the information they need to make an assessment of corporate misconduct is poorly maintained and incomplete.
For instance, seven workers were killed in 2010 after an explosion at an Anacortes, Wash., refinery owned by the Texas-based Tesoro Corp. The workers died trying to contain flammable gases after equipment ruptured in a facility that had not been inspected for 12 years. But the federal database, maintained by the General Services Administration, did not have a record of the incident, and Tesoro received $463 million in federal contracts in fiscal year 2012.
Companies that receive government contracts employ more than 1 in 5 of all American workers. Taxpayers spend more than $500 billion annually at these firms for everything from military hardware to processed chicken. This is an opportunity to reward the nation's best companies and punish those that rack up violations and make their workers' lives more difficult. At the very least, an annual list should be published naming federal contractors that were penalized or assessed for labor law violations, and the database should be improved.