Center for American Progress Action

RELEASE: CAP Action Report Finds That Government Contractors With a Track Record of Labor Violations Often Have Other Performance Issues
Press Release

RELEASE: CAP Action Report Finds That Government Contractors With a Track Record of Labor Violations Often Have Other Performance Issues

Washington, D.C. — A new report from the Center for American Progress Action Fund finds that government contractors with significant labor violations often have other serious performance issues that range from fraudulent billing to falsifying qualifications for employees to major cost overruns to producing defective, sometimes dangerous equipment. Conversely, policy reforms that increase companies’ compliance with worker protection laws may result in improved contract performance and support good value for public investments. The report suggests that a track record of labor violations is often an indicator that a company will have major issues in other areas, making them a poor investment for government resources.

The CAP Action analysis looks at 49 contractors that the Senate Health, Education, Labor, and Pensions Committee identified as being the worst violators of federal labor laws. Of those 49 companies, CAP Action finds that a total of 14 companies—29 percent—had significant performance problems on subsequent government contracts. These findings are based on a review of government records, press accounts, and publicly available court filings and enforcement databases. The report details government allegations of violations company by company, including both name brands, such as BP, and some of the government’s biggest contractors, including Lockheed Martin.

“Federal contractors with a history of labor violations often have major performance issues in other areas,” said Karla Walter, senior director of the American Worker Project at CAP Action and lead author of the analysis. “As the federal government looks to spend Infrastructure Investment and Jobs Act funds, it must also enforce protections guaranteeing that workers in these jobs are safe and paid the wages they are owed. Increasing oversight and enforcement will help generate the good jobs the legislation was designed to create and also ensure that companies aren’t engaged in other nefarious or wasteful practices. Failing to do so will ultimately squander resources and deny the country the infrastructure improvements that it so desperately needs.”

Read the report: “Corporations Are Violating Workers’ Rights and Harming the U.S. Government” by Karla Walter, Divya Vijay, and Malkie Wall

For more information on this topic or to speak to an expert, contact Julia Cusick at jcusick@americanprogress.org.