Center for American Progress Action

RELEASE: Report Reveals Government Contractors that Harm Workers Also Shortchange Taxpayers
Press Release

RELEASE: Report Reveals Government Contractors that Harm Workers Also Shortchange Taxpayers

Read the report.

Washington, D.C. — One in four government contractors that commit egregious workplace violations also provide bad value for taxpayers, according to a new report released today by the Center for American Progress Action Fund. The report was unveiled this morning at a CAP Action event featuring Sen. Tom Harkin (D-IA), where he discussed how the federal contracting process can be improved to promote compliance with workplace laws.

The federal government spends hundreds of billions of dollars every year on contracting out services. However, the review process to ensure that only responsible companies receive federal contracts is very weak, and too often, the government contracts with companies with long track records of violating workplace laws. The CAP Action report released today provides evidence that contracting with companies with egregious records of workplace violations also frequently results in poor performance of government contracts. The report unveils problems ranging from contractors falsifying firearms-safety test results for federal courthouse security guards, cost overruns, and schedule delays during the development of a major weapons system that cost taxpayers billions of dollars to an oil-rig explosion that spilled millions of barrels of oil into the Gulf of Mexico.

“The federal government could have prevented many of the performance problems we identify in the report by reviewing companies’ records of workplace violations and excluding those with the worst records,” said Karla Walter, Associate Director of the American Worker Project at the Center for American Progress Action Fund and co-author of the report. “Workplace violations should be a red flag, alerting the government to look twice before awarding a new contract.”

CAP Action’s analysis builds on a 2010 report from the Government Accountability Office, or GAO,  which scrutinized the companies levied with the 50 largest workplace health and safety penalties and those that received the 50 largest wage-theft assessments between fiscal years 2005 and 2009. That GAO investigation found that even after committing such violations, these companies frequently received new contracts. After reviewing the same universe of companies analyzed by the GAO, the CAP Action analysis found that these companies with the worst records of harming workers were also often guilty of shortchanging taxpayers through poor performance on government contracts in ways that provide a bad value for taxpayers.

Among the 28 companies that received the top workplace violations during that same timeframe and subsequently received federal contracts, a total of seven companies—or 25 percent—also had significant performance problems. Authored by CAP Action experts Karla Walter and David Madland, the report profiles the performance problems of the contractors.

Read the report: At Our Expense: Federal Contractors that Harm Workers Also Shortchange Taxpayers by Karla Walter and David Madland

Watch footage from the CAP Action event: How the Federal Contracting System Harms Workers and Taxpayers

To speak with an expert on this topic, contact Katie Peters at [email protected] or 202.741.6285.