“Shocking:” Debarred Contractors Still on the Job Federal agencies awarded contracts to at least 25 companies that had been suspended or debarred “for egregious offenses,” the Government Accountability Office found. “This is the tip of the iceberg,” GAO’s Gregory Kutz told the House Oversight and Government Reform Committee Feb. 26. Auditors said the companies had been excluded from federal contracting for offenses such as tax fraud, mail fraud, wire fraud, bribery, money laundering, bid rigging and selling faulty products to the government. In one case, the Army did not terminate a contract with Optronic, a German company, even after it knew the company’s president had been convicted of trying to smuggle nuclear weapons equipment to North Korea. An Army official said the company was providing crucial battlefield support. “The results are truly shocking,” said committee chairman Edolphus Towns, D-NY. GAO said there were many reasons for the improper contracts. Some contracting officers neglected to check the Excluded Parties List System, as regulations require before a contract is awarded. Some of the suspended and debarred companies were still listed on the GSA Schedule. Chairman Towns commented, “This begs the question: What is the point of having suspension and debarment regulations, if our own agencies disregard them?” But auditors also cited “ineffective management” of the Excluded Parties database by GSA. They said the database contains incomplete or erroneous information and its search capabilities are outmoded. Towns said, “EPLS’s search engine is so obsolete that queries performed for an excluded company with just one error in punctuation will fail to reveal a suspension or debarment altogether.” “Based on our investigation, if GSA is not more proactive in its management of the system, suspended and debarred companies will continue to improperly receive millions of taxpayer dollars,” GAO concluded. GSA officials said they expect to unveil a new Excluded Parties List System next year. It will provide automated alerts when a suspended or debarred contractor is being considered for a contract. In addition, Congress has ordered creation of a new governmentwide database to track administrative, civil and criminal actions against contractors.