GAO-03-163, Government Contracting: Adjudicated Violations of Certain Laws by Federal Contractors


This is the accessible text file for GAO report number GAO-03-163 
entitled 'Government Contracting: Adjudicated Violations of Certain 
Laws by Federal Contractors' which was released on December 16, 2002.



This text file was formatted by the U.S. General Accounting Office 

(GAO) to be accessible to users with visual impairments, as part of a 

longer term project to improve GAO products’ accessibility. Every 

attempt has been made to maintain the structural and data integrity of 

the original printed product. Accessibility features, such as text 

descriptions of tables, consecutively numbered footnotes placed at the 

end of the file, and the text of agency comment letters, are provided 

but may not exactly duplicate the presentation or format of the printed 

version. The portable document format (PDF) file is an exact electronic 

replica of the printed version. We welcome your feedback. Please E-mail 

your comments regarding the contents or accessibility features of this 

document to Webmaster@gao.gov.



Report to Congressional Requesters:



November 2002:



Government Contracting:



Adjudicated Violations of Certain Laws by Federal Contractors:



GAO-03-163:



Contents: 



Results in Brief: 



Background:



Thirty-Nine Federal Contractors Had Adjudicated Violations of Federal 

Environmental, Labor, or Antitrust Laws:



FAR Rule Implementation Issues Identified in Determining Incidence of 
Law 

Violations by Contractors:



Agency Comments and Our Evaluation:



Appendices:



Appendix I: Objectives, Scope, and Methodology:



Appendix II: Agency Cases Where a Law Violation Was Found by a Federal 

Court or Adjudicated Adminsitrative Decision:



Appendix III: GAO Contacts and Staff Acknowledgements:



GAO Contacts:



Acknowledgements:



Tables: 



Table 1: Number of Federal Contractors with Adjudicated Violations of 
Federal 

Environmental, Labor, Antitrust, Consumer, or Tax Laws: 



Table 2: Disposition of EPA and DOJ Environmental Law Cases involving 
Federal 

Contractors Closed during Fiscal Years 1997 through 1999: 



Table 3: Disposition of NLRB, DOL, and DOJ Labor and Employment Law 
Cases 

Involving Federal Contractors Closed during Fiscal Years 1997 through 
1999:



Table 4: Disposition of FTC and DOJ Antitrust Law Cases Involving 
Federal 

Contractors Closed during Fiscal Years 1997 through 1999:



Table 5: Disposition of CPSC and FTC Consumer Protection Cases 
Involving Federal

Contractors Closed during Fiscal Years 1997 through 1999: 



Table 6: Federal Contractors That Would Have Been Required to Report a 
Law 

Violation in the Certification of Their Offers under Our Conceptual 
Application of 

the FAR Rule: 



Table 7: Percent of False Matches for Cases Reviewed:



Abbreviations:



ALJ: Administrative Law Judge:



CERCLA: Comprehensive Environmental Response, Compensation and 
Disability Act:



CFR: Code of Federal REgulations:



CPSC: Consumer Product Safety Commission:



DOJ: Department of Justice:



DOL: Department of Labor:



DUNS: Data Universal Numbering System:



EIN: Employee Identification Number:



EPA: Environmental Protection Agency:



EPCRA: Emergency Planning and Community Right-to-Know Act:



ERISA: Employee Retirement Income Security Act:



FAR: Federal Acquisition Regulation:



FLSA: Fair Labor Standards Act:



FMLA: Family and Medical Leave Act:



FPDS: Federal Procurement Data System:



FTC: Federal Trade Commission:



GSA: General Services Administration:



IRS: Internal Revenue Service:



NESHAP: National Emission Standards for Hazardous Air Pollutants:



NLRA: National Labor Relations Act:



NLRB: National Labor Relations Board: 



OFCCP: Office of Federal Contract Compliance Programs:



OMB: Office of Management and Budget:



OSHA: Occupational Safety and Health Administration: 



PWBA: Pension and Welfare Benefits Administration:



TIN: Taxpayer Identification Number:



TSCA: Toxic Substances Control Act:



WHD: Wage and Hour Division:



Letter:



November 15, 2002:



The Honorable Tom Davis

Chairman, Subcommittee on Technology and Procurement Policy

Committee on Government Reform

House of Representatives:



The Honorable Stephen Horn

Chairman, Subcommittee on Government Efficiency,

Financial Management, and Intergovernmental Relations 

Committee on Government Reform

House of Representatives:



Each year the federal government awards billions of dollars in 

contracts for goods and services. By statute, federal agencies are 

required to award contracts to “responsible sources.”[Footnote 1] This 

statutory requirement has been implemented in the Federal Acquisition 

Regulation (FAR), which requires that government purchases be made 

from, and government contracts be awarded to, responsible prospective 

contractors only.[Footnote 2] In accordance with the statutory 

definition of “responsible source,”[Footnote 3] the FAR establishes “a 

satisfactory record of integrity and business ethics” as one of the 

general standards a prospective contractor must meet to be responsible. 

In December 2000, amidst considerable controversy, a revision to the 

FAR (“the FAR rule”) was promulgated through the regulatory rulemaking 

process to clarify what constituted “a satisfactory record of integrity 

and business ethics.”[Footnote 4] This now-revoked FAR rule stated that 

a satisfactory record of integrity and business ethics includes a 

record of satisfactory compliance with the law, specifically 

environmental, labor and employment, antitrust, consumer protection, 

and tax laws. It also required prospective contractors to certify in 

their bids or proposals submitted in response to government contract 

solicitations as to their compliance with these laws within the past 3 

years. Specifically, for federal government contracts expected to 

exceed $100,000, prospective contractors were to certify whether, 

relative to these areas of law, they have been convicted of a felony 

(or have felony indictments pending against them), have had a federal 

court judgment in a civil case brought by the United States rendered 

against them, or have had an adverse decision by a federal 

administrative law judge (ALJ), board, or commission indicating a 

willful violation of law. The FAR rule also provided guidance to agency 

contracting officers when considering a prospective contractor’s 

compliance history.



Although the FAR rule was revoked in December 2001, prospective 

contractors are still required by statute and the FAR to be responsible 

sources (including having a satisfactory record of business ethics and 

integrity). As a result of the FAR rule revocation, the FAR itself does 

not provide specific guidance to contracting officers on applying the 

standard for a satisfactory record of business ethics and integrity 

(bid protest decisions from courts and our Office that address the 

standard do, however, continue to provide guidance). Also, prospective 

contractors no longer have to certify, as they did under the FAR rule, 

as to their compliance with environmental, labor and employment, 

antitrust, consumer protection, and tax laws.



Because of your interest in this area, you asked that we address the 

following questions:



* To what extent have federal contractors violated federal 

environmental, labor and employment, antitrust, consumer protection, 

and tax laws (the areas of law specified in the FAR rule)?



* What FAR rule implementation issues were identified in our work in 

response to the first question?



To determine the extent of contractor violations, we gathered 

information on contractors that were awarded new federal contracts of 

at least $100,000[Footnote 5] in fiscal year 2000 and federal 

enforcement agency[Footnote 6] cases closed during fiscal years 1997 

through 1999 (October 1996 through September 1999).[Footnote 7] These 

were the types of contracts and cases that would have been covered by 

the FAR rule’s contractor certification requirement had it been applied 

beginning with fiscal year 2000,[Footnote 8] the last full fiscal year 

for which contractor data were available at the start of our work.



We then matched the names of contractors listed in the Federal 

Procurement Data System (FPDS)--which is maintained by the General 

Services Administration (GSA)--shown as having new federal contracts 

awarded in fiscal year 2000 to names in enforcement agency cases closed 

during fiscal years 1997 to 1999. These names were in the databases 

maintained by seven federal agencies responsible for enforcing or 

administering many federal environmental, labor and employment, 

antitrust, consumer protection, or tax laws.[Footnote 9] However, the 

name-matching process was sometimes imprecise because contractor names 

can vary widely due to such factors as spelling, name combinations, and 

parent/subsidiary relationships. Nevertheless, this was generally the 

only viable method available for identifying contractors involved in 

these cases because, usually, common numeric identifiers were not 

available. Therefore, due to name variations, we likely did not 

identify all of the contractors involved in the cases in the databases 

maintained by the enforcement agencies we examined. Conversely, we 

found some false matches--companies with similar names involved in the 

cases but which were not the same companies as the contractors. Where 

we detected false matches, we eliminated them. See appendix I for 

further information about the accuracy of the matches.



When we matched a name associated with a closed case involving a 

federal enforcement agency with the name of a contractor, we reviewed 

the disposition of the case as characterized by the agency in its 

database. Where a case resulted in an actual decision by a court or an 

administrative adjudicator finding that a violation (including 

convictions and plea agreements in criminal cases) had occurred, we 

reported the numbers of such cases under the “violation found” column 

in tables 2 through 5 of this report corresponding to the areas of law 

for which the enforcement agencies are responsible. Adjudicated 

violations were the type of information on violations of laws that 

contracting officers were instructed by the FAR rule to give the 

greatest weight in making their responsibility determinations. For 

cases that did not result in an actual decision (such as those that 

were dismissed, withdrawn, or settled) or for cases that generally 

could not have resulted in a determination of a law violation (such as 

Environmental Protection Agency (EPA) “Superfund” cases involving the 

assessment of liability for cleanup costs), we reported the total 

number of such cases under the “other/resolved before decision” column 

of the respective tables because such cases were resolved either 

through a process that did not involve a law violation determination or 

without an actual adjudicated determination of a law violation.



To identify FAR rule implementation issues from our work in response to 

the first objective, we analyzed information from the enforcement 

agency cases we matched to federal contractors and considered what 

information the contractors would have had to certify under the FAR 

rule’s certification requirement. Additionally, we discussed FAR rule 

implementation issues and concerns with (1) contracting officers and 

other officials from the federal agencies included in our review and 

(2) contractors involved in the cases we selected for detailed review. 

Finally, we requested comments on the results of our work from 

officials from the seven federal agencies, DOD, NASA, and GSA, and the 

Administrator for Federal Procurement:



Policy.[Footnote 10] We conducted our work from July 2000 through 

October 2002 in accordance with generally accepted government auditing 

standards. A more detailed description of our scope and methodology is 

included in appendix I.



Results in Brief:



We identified 39 contractors among the 16,819 contractors that were 

awarded new federal contracts in amounts of at least $100,000 during 

fiscal year 2000 and that were found by a federal court or adjudicated 

administrative decision to have violated one or more federal 

environmental, labor and employment, or antitrust laws in enforcement 

agency cases that were closed during fiscal years 1997 through 1999. Of 

these 39 contractors, 7 had been convicted of a crime in federal court; 

5 had a federal court judgment in a civil case brought by the federal 

government rendered against them, and 27 had an adverse decision by a 

federal ALJ, board, or commission indicating a violation of 

law.[Footnote 11] We did not identify any contractors that were found 

by a federal court or adjudicated administrative decision to have 

violated consumer protection or tax laws. We also identified another 

3,403 contractors that were involved in enforcement agencies’ cases 

(not including IRS tax penalty assessments) covered by our review and 

closed during this 3-year period. However, most of these cases that 

involved alleged law violations were resolved before a decision by a 

court or administrative adjudicator was reached as to whether a 

violation of law had occurred. In most instances, these cases were 

resolved through some form of “administrative agreement” or 

“settlement” with the government in which the contractor typically did 

not admit--and sometimes specifically denied--the violation charged and 

which did not constitute a judgment or adjudicated administrative 

decision that a violation had actually occurred.



We identified several FAR rule implementation issues through our work 

in determining the incidence of contractor violations in response to 

the first question. First, the FAR rule’s contractor certification 

requirement focused on only certain types of law violations. As a 

result--on the basis of our conceptual application of the certification 

criteria specified in the revoked FAR rule--only 7 of the 39 

contractors we identified as being found by a court or administrative 

decision to have violated the law would have been required to report 

the violations in their certifications if they were prospective 

contractors submitting an offer. The remaining 32 contractors with 

violations found by a court or administrative decision, as well the 

3,403 contractors whose cases were otherwise resolved, would not have 

been required to report any noncompliance with the law. Further, 

although many cases were resolved through administrative agreements 

(settlements)--and the FAR rule stated that contracting officers should 

take such information into consideration--the FAR rule did not require 

prospective contractors to report such agreements. Second, we found 

that contracting officers would face significant difficulties in 

verifying or obtaining contractor compliance history information. 

Third, the FAR rule may have required additional record keeping for 

some prospective contractors in order for them to track their 

companies’ compliance with applicable laws and accurately certify as to 

their compliance when submitting their offers. Of the 43 federal 

contractors who provided us information on the issue of tracking their 

compliance history, 18 told us that they did not have the capability to 

identify or track all of the various types of enforcement actions that 

may have been taken against them.



The federal agencies involved in our review either had no comments or 

provided us technical comments on a draft of this report. We made 

changes to this report based on these technical comments where 

appropriate.



Background:



Prior to January 2001, the FAR had not provided any elaboration on what 

it means for a prospective contractor to have “a satisfactory record of 

integrity and business ethics.” The FAR simply restated the statutory 

language that a “responsible source” is one that has a “satisfactory 

record of integrity and business ethics.”[Footnote 12] In December 
2000, the 

FAR Council issued a final rule, effective January 19, 2001, to clarify 

what constituted “a satisfactory record of integrity and business 

ethics” in making contractor responsibility determinations,[Footnote 

13] including satisfactory compliance with the law, specifically 

environmental, labor and employment, antitrust, consumer protection, 

and tax laws. According to the FAR Council, the lack of guidance in the 

FAR as to what constitutes a satisfactory record of integrity and 

business ethics had caused contracting officers to be extremely 

reluctant to exercise their discretion in making this determination; 

and, as a result, the government continued to award contracts to firms 

that have violated procurement and other federal laws, in some cases 

repeatedly. In promulgating the FAR rule, the FAR Council surmised that 

by giving contracting officers a clearer basis for declining to 

contract with such businesses, the government could improve the 

integrity of the contracting process, reduce the risk of fraud or 

noncompliance, and encourage standards of integrity and compliance with 

the law. According to the FAR Council, by ensuring that its contractors 

possess a satisfactory record of compliance with the law, the 

government increases its confidence that a contractor is a responsible, 

reliable company that will perform the contract in an efficient, 

responsible, and timely manner and should also reduce the risk that 

compliance issues will interfere with performance of the contract.



The FAR rule provided guidance to contracting officers on the 

application of the integrity and business ethics standard. 

Specifically, the FAR rule stated that a contracting officer’s 

determination that a prospective contractor has a satisfactory record 

of integrity and business ethics in order to receive a government 

contract “can be made by examining a prospective contractor’s record of 

compliance with the law.” The guidance further stated that in making a 

responsibility determination based upon integrity and business ethics, 

contracting officers “must consider all relevant credible information” 

but should give the greatest weight to violations of laws that have 

been adjudicated within the last 3 years preceding the prospective 

contractor’s offer.[Footnote 14] The guidance stated that normally, a 

single violation of law will not give rise to a determination of 

nonresponsibility, but evidence of repeated, pervasive, or significant 

violations of the law may indicate an unsatisfactory record of 

integrity and business ethics. The guidance instructed contracting 

officers to give consideration to any administrative agreements entered 

into with prospective contractors who take corrective action after 

disclosure of law violations by an enforcement agency (i.e., after an 

initial charge or complaint is filed against the contractor by the 

agency alleging a law violation). The FAR rule specified that these 

prospective contractors, despite findings of law violations by the 

enforcement agency, may continue to be responsible contractors because 

they had corrected the conditions that led to the alleged misconduct. 

On the other hand, according to the FAR rule, failure of a prospective 

contractor to have complied with the terms of an administrative 

agreement is evidence of a lack of integrity and business ethics.



The FAR rule required contracting officers to consider information 

based on the following, in descending order of importance.



* Convictions of and civil judgments rendered against the prospective 

contractor for:



* commission of fraud or a criminal offense in connection with 

obtaining, attempting to obtain, or performing a public (federal, 

state, or local) contract or subcontract;



* violation of federal or state antitrust statutes relating to the 

submission of offers; or:



* commission of embezzlement, theft, forgery, bribery, falsification or 

destruction of records, making false statements, tax evasion, or 

receipt of stolen property.



* Indictments for the above offenses.



* Relative to tax, labor and employment, environmental, antitrust, or 

consumer protection laws:



* federal or state felony convictions;



* adverse federal court judgments in civil cases brought by the United 

States;



* adverse decisions by a federal ALJ, board, or commission indicating 

violations of law; or:



* federal or state felony indictments.



Finally, the FAR rule stated that contracting officers might consider 

other relevant information, such as civil or administrative complaints 

or similar actions filed by or on behalf of a federal agency, board, or 

commission, if such action reflects an adjudicated determination by the 

agency.



To provide a mechanism for contracting officers to consider a 

prospective contractor’s compliance history, the FAR rule amended 

existing certifications[Footnote 15] required to be included in 

solicitations where the contract value is expected to exceed the 

simplified acquisition threshold ($100,000).[Footnote 16] 
Specifically, 

under the existing certification,[Footnote 17] the prospective 
contractor 

is to certify, by checking the appropriate box on the form, whether, to 

the best of its knowledge and belief, it or its principals[Footnote 18]



* are or are not presently debarred, suspended, proposed for debarment, 

or declared ineligible for the award of contracts by any federal 

agency;



* have or have not, within the preceding 3 years, been convicted of or 

had a civil judgment rendered against them for:



* commission of fraud or a criminal offense in connection with 

obtaining, attempting to obtain, or performing a federal, state, or 

local government contract or subcontract;



* violation of federal or state antitrust statutes relating to the 

submission of offers; or:



* commission of embezzlement, theft, forgery, bribery, falsification or 

destruction of records, making a false statement, tax evasion, or 

receiving stolen property;



* are or are not presently indicted for, or otherwise criminally or 

civilly charged by a government entity with commission of any of these 

offenses.



The FAR rule added to this existing certification whether the 

prospective contractor or its principals have, relative to tax, labor 

and employment, environmental, antitrust, or consumer protection laws:



* been convicted of a federal or state felony (or have federal or state 

felony indictments pending against them);



* had a federal court judgment in a civil case brought by the United 

States rendered against them; or:



* had an adverse decision by a federal ALJ, board, or commission 

indicating a willful violation of law.



The FAR rule specified that a contractor needed to provide additional 

detailed information only upon request of the contracting officer and 

generally only when that contractor was the apparent successful 

offeror.



In January 2001, immediately after its effective date, several agencies 

suspended their implementation of the FAR rule under an authorized FAR 

“class deviation” procedure.[Footnote 19] After further review, the FAR 

Council temporarily set aside the rule in April 2001 because the 30-day 

effective date did not give contractors and the government sufficient 

time to meet the new obligations and responsibilities imposed by the 

rule.[Footnote 20] Specifically, the FAR Council stated that government 

contracting officers had not had sufficient training, and prospective 

contractors had not had sufficient time to establish a system to track 

compliance with applicable laws and keep it current in order to 

properly fill out the certification. The FAR Council recognized that it 

would take more time than it had anticipated for businesses to put the 

systems in place. After further consideration and public comment, the 

FAR Council revoked the FAR rule in December 2001.[Footnote 21] 

According to the FAR Council, the benefits of the FAR rule were 

outweighed by the burdens imposed. The FAR Council stated that it was 

not clear that there is a justification for including the added 

categories of covered laws in the rule and its implementing 

certification, that the rule provided sufficient guidelines to 

contracting officers to prevent arbitrary or abusive implementation, or 

that the rule was justified from a cost-benefit perspective.



In revoking the FAR rule, the FAR Council stated that it fully supports 

the proposition that government contracts should be awarded to law-

abiding entities and that the government should do business only with 

those entities willing and able to comply with the laws enumerated in 

the FAR rule. According to the FAR Council, the problem lies in the 

means for ensuring that the entities with which the government conducts 

business are good corporate citizens and adhere to the myriad of 

regulations and laws. The FAR Council determined that the existing 

suspension and debarment process is the proper vehicle to accomplish 

this goal. Specifically, the FAR Council noted that the 

suspension[Footnote 22] and debarment[Footnote 23] rules contain well 

established and defined decision-making criteria and due process 

safeguards, which have evolved through case law precedent and agency 

practices. The FAR Council noted that an agency debarring official is 

authorized to consider a company’s responsibility at any time whether 

the company is a current competitor for a government contract or not; 

and if the debarring official should determine that the company is not 

responsible, the official may impose a debarment of the company. This 

debarment is effective with regard to all federal agencies as well as 

to many state and local governments that choose to use a debarment list 

of their own. According to the FAR Council, when a question of a 

company’s honesty and integrity is raised, reliance on debarment and 

suspension remedies provides effective intervention.



While the decision to debar or suspend a contractor is made within the 

discretion of the agency involved, the determination of a contractor’s 

responsibility (including whether it has a satisfactory record of 

business ethics and integrity) continues to be mandatory for each 

contract award. Although the FAR rule was revoked, the statutory 

standard of a satisfactory record of business ethics and integrity 

remains one of the standards required for a prospective contractor to 

be considered a responsible source for the award of a government 

contract. This standard continues to be implemented in the FAR. 

However, as a result of the FAR rule revocation, the FAR itself no 

longer provides specific guidance to contracting officers on applying 

the standard. Nonetheless, contracting officers are not entirely 

without guidance since they do have available legal interpretations 

from the courts and the Comptroller General as to the application of 

the standard. These interpretations are in the context of bid protest 

decisions addressing challenges to responsibility determinations in the 

award of government contracts.[Footnote 24] Also, while prospective 

contractors no longer (as a result of the FAR rule revocation) have to 

specifically certify as to their compliance with environmental, labor 

and employment, antitrust, consumer protection, and tax laws, 

prospective contractors must still certify as to debarment, suspension, 

and the offenses listed in the existing certifications. A contracting 

officer must still check whether a prospective contractor is suspended 

or debarred before awarding a contract.



We issued two reports several years ago that addressed the issue of 

federal contractors who had violated nonprocurement-related 

laws.[Footnote 25] Our October 1995 report identified federal 

contractors found by the NLRB to have violated the National Labor 

Relations Act (NLRA), and our August 1996 report identified contractors 

charged with Occupational Safety and Health Act violations by the 

Occupational Safety and Health Administration (OSHA). In the first 

report, we found that 80 firms with over 4,400 federal contracts valued 

at over $23 billion in fiscal year 1993 had violated the NLRA as 

determined in adjudicated decisions of the NLRB. These contractors 

accounted for 2 percent of the nearly 200,000 federal contracts in 

effect in fiscal year 1993 that were being performed by over 57,000 

parent firms. However, 6 of the 80 firms with NLRA violations accounted 

for almost 90 percent of the $23 billion in contracts. In the second 

report, we identified 261 firms that had federal contracts in effect in 

fiscal year 1994 that had been “initially charged” with OSHA violations 

that carried a possible fine or penalty of more than $15,000 for 

noncompliance with health or safety regulations. We did not include or 

discuss the resolution of any of these cases in the report, such as the 

adjudicated outcome.



Thirty-Nine Federal Contractors Had Adjudicated Violations of Federal 

Environmental, Labor, or Antitrust Laws:



We identified 39 federal contractors (involved in 47 cases), among the 

16,819 contractors awarded new federal contracts in amounts of at least 

$100,000 during fiscal year 2000, that had been found by a federal 

court or adjudicated administrative decision to have violated one or 

more federal environmental, labor or employment, or antitrust laws in 

cases closed by enforcement agencies during fiscal years 1997 through 

1999. As table 1 shows, 7 of these 39 contractors had been convicted of 

a crime in federal court;[Footnote 26] 5 had a judgment in a civil case 

brought by the federal government in federal court rendered against 

them; and 27 had an adverse decision by a federal ALJ, board, or 

commission finding a violation of law.[Footnote 27] These 39 

contractors had 39 different contracts of $100,000 or more totaling 

approximately $855 million.[Footnote 28] We did not identify any 

contractors that were found by a federal court or adjudicated 

administrative decision to have violated consumer protection or tax 

laws during this time frame.



Table 1: Number of Federal Contractors with Adjudicated Violations of 

Federal Environmental, Labor, Antitrust, Consumer, or Tax Laws:



Area of law: Environmental; Number of contractors by type of 

adjudication: Criminal (federal court): 7; Number of contractors by 

type of adjudication: Civil (federal court): 2; Number of contractors 

by type of adjudication: Administrative (federal ALJ, Board, or 

Commission): 2; Number of contractors by type of adjudication: Total 

violators: 11.



Area of law: Labor and employment[A]; Number of contractors by type of 

adjudication: Criminal (federal court): 0; Number of contractors by 

type of adjudication: Civil (federal court): 2; Number of contractors 

by type of adjudication: Administrative (federal ALJ, Board, or 

Commission): 25; Number of contractors by type of adjudication: Total 

violators: 27.



Area of law: Antitrust; Number of contractors by type of adjudication: 

Criminal (federal court): 0; Number of contractors by type of 

adjudication: Civil (federal court): 1; Number of contractors by type 

of adjudication: Administrative (federal ALJ, Board, or Commission): 0; 

Number of contractors by type of adjudication: Total violators: 1.



Area of law: Consumer protection; Number of contractors by type of 

adjudication: Criminal (federal court): 0; Number of contractors by 

type of adjudication: Civil (federal court): 0; Number of contractors 

by type of adjudication: Administrative (federal ALJ, Board, or 

Commission): 0; Number of contractors by type of adjudication: Total 

violators: 0.



Area of law: Tax; Number of contractors by type of adjudication: 

Criminal (federal court): 0; Number of contractors by type of 

adjudication: Civil (federal court): 0; Number of contractors by type 

of adjudication: Administrative (federal ALJ, Board, or Commission): 0; 

Number of contractors by type of adjudication: Total violators: 0.



Area of law: Total; Number of contractors by type of adjudication: 

Criminal (federal court): 7; Number of contractors by type of 

adjudication: Civil (federal court): 5; Number of contractors by type 

of adjudication: Administrative (federal ALJ, Board, or Commission): 

27; Number of contractors by type of adjudication: Total violators: 39.



[A] Because the table reports on the number of contractors with 

adjudicated violations, we listed the one contractor with violations 

adjudicated in both federal court and administratively only under Civil 

(federal court).



Source: GAO analysis of enforcement agency data.



[End of table]



In addition, we identified another 3,403 contractors involved in 

another 6,705 cases[Footnote 29] closed during the 3-year period 

covered by our review and listed in the databases of one or more of the 

agencies responsible for enforcing or administering federal 

environmental, labor and employment, antitrust, consumer protection, or 

tax laws (not including IRS tax penalty assessments, which are 

discussed below). However, most of these cases that involved alleged 

law violations were resolved before a court or adjudicated 

administrative decision was made as to whether a violation of law had 

occurred. The resolution usually involved some kind of “administrative 

agreement” (settlement). Although the agreements reflect that the 

enforcement agency charged the contractor with a violation, the 

contractor typically did not admit (or deny)[Footnote 30] any 

wrongdoing, and sometimes the agreement actually contained language 

whereby the contractor specifically denied any violation. In these 

cases, the parties reached some alternate resolution, usually involving 

the contractor taking corrective action, assuring compliance with the 

law, and agreeing to make some form of payment to the government. Many 

of these agreements also provided for penalties and remedies if the 

contractor did not abide by the agreement. Even though a federal court 

or an administrative adjudicator, such as an ALJ, typically approved 

the agreement (i.e., through a consent order) and the case was 

considered “adjudicated” on that basis, this approval did not 

constitute an adjudicated decision that a violation had actually 

occurred. We recognize, of course, that enforcement agencies often 

attempt to reach agreements with alleged violators to achieve 

compliance instead of litigating cases to the point of an adjudicated 

decision. As set out below, we report on the number of cases that were 

resolved before an adjudicated decision was reached or that were 

otherwise resolved--cases that include agreements between enforcement 

agencies and alleged violators for achieving compliance.



Eleven Federal Contractors Had Adjudicated Violations of Federal 

Environmental Laws:



EPA has administrative law enforcement authority in the majority of 

federal environmental statutes, including (1) the Clean Air Act 

(regulates air emissions and authorizes EPA to establish air quality 

standards to protect public health and the environment); (2) the Clean 

Water Act (regulates discharges of pollutants into the waters of the 

United States by giving EPA authority to implement pollution control 

programs and to set water quality standards and by prohibiting the 

discharge of any pollutant from a point source into navigable waters 

unless a permit is obtained); (3) the Resource Conservation and 

Recovery Act (authorizes EPA to regulate the generation, 

transportation, treatment, storage, and disposal of hazardous waste); 

and (4) many others, such as the Toxic Substances Control Act, the 

Emergency Planning and Community Right-To-Know Act, and the Federal 

Insecticide, Fungicide, and Rodenticide Act. EPA may issue 

administrative orders assessing civil penalties and directing 

compliance.[Footnote 31] EPA may also bring civil or criminal 

enforcement actions, in:



which case the Environment and Natural Resources Division of the DOJ or 

local U.S. Attorneys handle the matter.[Footnote 32]



EPA and DOJ also handle cases under the Comprehensive Environmental 

Response, Compensation and Liability Act (CERCLA), which provides a 

federal “Superfund” to clean up hazardous-waste sites. Actions under 

CERCLA typically involve the assessment of liability of responsible 

parties for cleanup costs rather than the determination of a statutory 

or regulatory violation. Where EPA performs a cleanup, it will seek to 

recover the cleanup costs from financially viable parties once a 

response action has been completed. However, CERCLA can be violated, 

for example, where a party fails to comply with an order or agreement 

or fails to report hazardous substance releases as required.



We matched 443 contractors (involved in 698 cases) to cases closed by 

EPA during fiscal years 1997 through 1999. We also matched 75 

contractors (involved in 124 cases) to cases closed by DOJ during this 

period. Further, as shown in table 2, contractors involved in 11 of the 

cases were found by a court or adjudicated administrative decision to 

have violated one or more environmental laws. These 11 cases involved 

11 contractors.



Table 2: Disposition of EPA and DOJ Environmental Law Cases Involving 

Federal Contractors Closed during Fiscal Years 1997 through 1999:



[See PDF for image]



[A] Violation found - A federal court or adjudicated administrative 

decision found a violation of law. :



[B] Other/Resolved before decision - Cases that did not involve a 

determination of law violation (such as liability for hazardous waste 

cleanup under CERCLA), cases where no violation was found, cases closed 

before a decision was made by a federal court or an administrative 

adjudicator (such as administrative agreements and consent orders), and 

cases that were otherwise closed/resolved.



[C] Only selected cases were reviewed and verified.



[D] We excluded from this analysis 11 additional cases involving 

federal contractors because EPA’s data showed that the cases were 

combined with other cases and did not show the cases’ final disposition 

and 81 other cases involving federal contractors because EPA’s data did 

not show the disposition of the cases. :



[ E] DOJ environmental cases managed by DOJ’s Environment and Natural 

Resources Division or U.S. Attorneys. :



Source: GAO analysis of enforcement agency data.



[End of table]



Twenty-Seven Federal Contractors Had Adjudicated Violations of Federal 

Labor and Employment Laws:



NLRB administers the National Labor Relations Act, the primary federal 

law governing relations between labor unions and employers in the 

private sector. The act guarantees the right of employees to organize 

and to bargain collectively with their employers or to refrain from 

such activity. NLRB’s statutory mission is to prevent and remedy 

unlawful acts, called unfair labor practices, by either employers or 

unions. The agency does not act on its own motion but processes charges 

or allegations of unfair labor practices against an employer or labor 

organization. If, after an investigation, the NLRB finds reasonable 

cause to believe a violation of the law has occurred, the agency can 

seek a voluntary settlement to remedy the violation. If settlement 

efforts fail, a formal complaint can be issued and the case is heard by 

an ALJ. The case can be appealed to the full Board for a final agency 

determination.



The U.S. Department of Labor (DOL) is responsible for enforcing federal 

labor and employment laws. We focused our work on the following DOL 

offices:



* The Wage and Hour Division (WHD) works to enhance the welfare and 

protect the rights of the nation’s workers through enforcement of the 

federal minimum wage, overtime pay, record keeping, and child labor 

requirements of the Fair Labor Standards Act; the Family and Medical 

Leave Act; and employment standards and worker protections provided in 

certain other laws. Additionally, WHD administers and enforces the 

prevailing wage requirements of the Davis-Bacon Act, the Service 

Contract Act, and other statutes applicable to federal contracts for 

construction and for the provision of goods and services.



* The Pension and Welfare Benefits Administration (PWBA) is responsible 

for promoting and protecting the pension, health, and other benefits of 

the over 150 million participants and beneficiaries in over 6 million 

private sector employee benefit plans under the Employee Retirement 

Income Security Act of 1974 (ERISA).



* The Office of Federal Contract Compliance Programs (OFCCP) enforces 

equal opportunity standards and affirmative action for women, 

minorities, Vietnam era veterans, and persons with disabilities 

employed by more than 200,000 contractors and subcontractors that 

participate in the federal procurement process. Applicable authorities 

include Executive Order 11246 (Equal Opportunity in Federal 

Employment), the Rehabilitation Act of 1973, the Vietnam Era Veterans’ 

Readjustment Assistance Act of 1974, and the Americans With 

Disabilities Act of 1990.[Footnote 33]



* The mission of OSHA, as defined in its enabling legislation, the 

Occupational Safety and Health Act, is to “[a]ssure so far as possible 

every working man and woman in the Nation safe and healthful working 

conditions.” This mandate involves standards development, enforcement 

(such as through workplace inspections), and compliance assistance so 

that employers maintain safe and healthful workplaces.



These agencies have formal administrative adjudication processes for 

complaints filed in enforcing the laws for which they are responsible. 

Under certain circumstances, DOL may also debar contractors for 

violations of certain labor laws or declare them ineligible for failure 

to satisfy the equal opportunity or affirmative action obligations of 

federal contracts.



For the time period covered by our review, we matched 29 contractors 

(involved in 34 cases) to cases closed by NLRB; 2,847 contractors 

(involved in 5,128 cases) to cases closed by DOL; and 6 contractors 

(involved in 6 cases) to cases closed by DOJ --3 of the DOJ cases were 

handled by DOJ’s Civil Rights Division, and 3 cases were handled by 

U.S. Attorneys. As shown in table 3, contractors involved in 30 of the 

NLRB cases, 4 of the DOL cases, and 1 of the DOJ cases were found to 

have violated one or more federal labor or employment laws by a federal 

court or adjudicated administrative decision. In total, 27 different 

federal contractors were involved in these 35 cases identified as 

having labor and employment law violations. The remaining cases were 

resolved with a wide range of outcomes, including consent agreements 

and orders, before a decision by a court or administrative adjudicator 

was reached as to whether a violation of law had occurred.[Footnote 34]



Table 3: Disposition of NLRB, DOL, and DOJ Labor and Employment Law 

Cases Involving Federal Contractors Closed during Fiscal Years 1997 

through 1999:



Labor and employment laws: Responsible agency/case disposition; 

Violation found[A]: [Empty]; Other/Resolved before decision[B]: 

[Empty]; Total: [Empty].



Labor and employment laws: National Labor Relations Board; Violation 

found[A]: [Empty]; Other/Resolved before decision[B]: [Empty]; Total: 

[Empty].



Labor and employment laws: Administrative[C]; Violation found[A]: 30; 

Other/Resolved before decision[B]: 4; Total: 34.



Labor and employment laws: Subtotal; Violation found[A]: 30; Other/

Resolved before decision[B]: 4; Total: 34.



Labor and employment laws: Department of Labor; Violation found[A]: 

[Empty]; Other/Resolved before decision[B]: [Empty]; Total: [Empty].



Labor and employment laws: Civil; Violation found[A]: 1; Other/Resolved 

before decision[B]: 1; Total: 2.



Labor and employment laws: Administrative[D,E]; Violation found[A]: 3; 

Other/Resolved before decision[B]: 5,123; Total: 5,126.



Labor and employment laws: Subtotal; Violation found[A]: 4; Other/

Resolved before decision[B]: 5,124; Total: 5,128[ C].



Labor and employment laws: Department of Justice[F]; Violation 

found[A]: [Empty]; Other/Resolved before decision[B]: [Empty]; Total: 

[Empty].



Labor and employment laws: Civil[C]; Violation found[A]: 1; Other/

Resolved before decision[B]: 5; Total: 6.



Labor and employment laws: Subtotal; Violation found[A]: 1; Other/

Resolved before decision[B]: 5; Total: 6.



Labor and employment laws: Total; Violation found[A]: 35; Other/

Resolved before decision[B]: 5,133; Total: 5,168.



[A] Violation found - A federal court or adjudicated administrative 

decision found a violation of law. :



[B] Other/Resolved before decision - Cases that did not involve a 

determination of law violation, cases where no violation was found, 

cases closed before a decision was made by a federal court or 

administrative adjudicator (such as administrative agreements and 

consent orders), and cases that were otherwise closed/resolved. :



[C] NLRB administrative cases include ALJ and Board decisions (we did 

not include cases for which the NLRB, under its statutory authority, 

obtained injunctive relief in federal court because these cases are 

still pending full review by the Board or enjoin conduct the Board has 

already found unlawful).



[D] Only selected cases were reviewed and verified.



[E] We excluded from this analysis 557 additional cases involving 

federal contractors because DOL’s data did not show the disposition of 

the cases. We also excluded another 67 DOL cases that were decided by 

an ALJ, Review Commission, or appeals court ruling because the cases 

were not included in our case selection and the final disposition of 

the cases could not be determined. :



[F] Labor and employment compliance action cases managed by the DOJ’s 

Civil Rights Division or U.S. Attorneys. :



Source: GAO analysis of enforcement agency data.



[End of table]



One Federal Contractor Was Convicted in Federal Court of Violating 

Federal Antitrust Laws:



The Bureau of Competition of the Federal Trade Commission (FTC) and 

DOJ’s Antitrust Division enforce the federal antitrust laws. FTC 

enforces the Federal Trade Commission Act, which prohibits unfair 

methods of competition. DOJ’s Antitrust Division has responsibility for 

enforcing the Sherman Antitrust Act, which prohibits conspiracies or 

agreements that restrain trade, fix prices, divide market territories 

or groups of customers, boycott other firms, or use coercive tactics 

with the intent and effect of injuring competition. Both FTC and DOJ 

have jurisdiction under the Clayton Antitrust Act, which prohibits 

mergers and acquisitions of stock or assets that may substantially 

lessen competition or that tend to create a monopoly and which bars 

certain forms of price discrimination. Both agencies also are 

responsible for reviewing proposed corporate mergers under the Hart-

Scott-Rodino Act. FTC uses both administrative and judicial remedies to 

enforce the law through litigation before administrative law judges or 

in federal court. DOJ investigates and prosecutes criminal violations 

of federal antitrust laws; and where criminal prosecution is not 

appropriate, DOJ may institute a civil action seeking a court order 

forbidding future violations of the law and requiring steps to remedy 

the anticompetitive effects of past violations.



We matched 22 contractors (involved in 25 cases) to cases closed by FTC 

and 7 contractors (involved in 7 cases) to cases closed by DOJ during 

fiscal years 1997 through 1999. As shown in table 4, in 1 of the 32 

cases the contractor was convicted of violating federal antitrust laws 

in federal court after pleading guilty in a case prosecuted by 

DOJ.[Footnote 35] This case is described in appendix II. None of the 

other 31 cases--including proposed merger reviews[Footnote 36]--

involved a decision by a federal court or administrative adjudicator 

that a violation of antitrust law had or had not occurred; i.e., the 

contractors and the government settled or the case was otherwise 

resolved.



Table 4: Disposition of FTC and DOJ Antitrust Law Cases Involving 

Federal Contractors Closed during Fiscal Years 1997 through 1999:



Antitrust laws: Responsible agency/case disposition; Violation 

found[A]: [Empty]; Other/Resolved before decision[B]: [Empty]; Total: 

[Empty].



Antitrust laws: Federal Trade Commission[C]; Violation found[A]: 

[Empty]; Other/Resolved before decision[B]: [Empty]; Total: [Empty].



Antitrust laws: Civil; Violation found[A]: 0; Other/Resolved before 

decision[B]: 1; Total: 1.



Antitrust laws: Administrative; Violation found[A]: 0; Other/Resolved 

before decision[B]: 24; Total: 24.



Antitrust laws: Subtotal; Violation found[A]: 0; Other/Resolved before 

decision[B]: 25; Total: 25.



Antitrust laws: Department of Justice[D]; Violation found[A]: [Empty]; 

Other/Resolved before decision[B]: [Empty]; Total: [Empty].



Antitrust laws: Criminal; Violation found[A]: 1; Other/Resolved before 

decision[B]: [Empty]; Total: 1.



Antitrust laws: Civil; Violation found[A]: [Empty]; Other/Resolved 

before decision[B]: 6; Total: 6.



Antitrust laws: Subtotal; Violation found[A]: 1; Other/Resolved before 

decision[B]: 6; Total: 7.



Antitrust laws: Total; Violation found[A]: 1; Other/Resolved before 

decision[B]: 31; Total: 32.



[A] Violation found - A federal court or adjudicated administrative 

decision found a violation of law. :



[B] Other/Resolved before decision - Cases that did not involve a 

determination of law violation, cases where no violation was found, 

cases closed before a decision was made by a federal court or 

administrative adjudicator (such as administrative agreements and 

consent orders), and cases that were otherwise closed/resolved. :



[C] FTC has independent authority to litigate all but civil penalty and 

criminal antitrust cases. FTC administrative cases include ALJ and 

Commission decisions.



[D] Antitrust cases managed by DOJ’s Antitrust Division or U.S. 

Attorneys. :



Source: GAO analysis of enforcement agency data.



[End of table]



No Federal Contractors Had an Adjudicated Violation of Federal Consumer 

Protection Laws:



The mission of federal agencies that enforce federal consumer 

protection laws is generally to either ensure consumer product safety 

or stop deceptive or unfair trade practices against consumers. The 

Consumer Product Safety Act of 1972 consolidated federal safety 

regulatory activity for consumer products within the Consumer Product 

Safety Commission:



(CPSC), whose jurisdiction encompasses about 15,000 types of 

products.[Footnote 37] CPSC can impose civil penalties and take other 

enforcement action for violations of federal consumer product safety 

standards through administrative adjudication and judicial processes. 

Protecting consumers against unfair, deceptive, or fraudulent practices 

is a mission of FTC under the Federal Trade Commission Act. FTC is also 

responsible for enforcing several laws, such as the Truth-in-Lending 

Act and the Fair Credit Reporting Act, that prohibit specifically 

defined trade practices. FTC enforces its consumer protection mandate 

(as well as trade regulations issued by the Commission) through 

administrative actions and federal court litigation.



We matched no contractors to the cases that were closed by CPSC during 

fiscal years 1997 through 1999. We matched 12 contractors (involved in 

13 cases) to FTC consumer protection cases closed during this period. 

As shown in table 5, all of these cases were resolved before a court or 

the FTC reached any adjudicated decision as to a violation of consumer 

protection law. Specifically, FTC and the contractors settled all the 

cases through the use of administrative agreements.



Table 5: Disposition of CPSC and FTC Consumer Protection Cases 

Involving Federal Contractors Closed during Fiscal Years 1997 through 

1999:



Consumer protection laws: Responsible agency/case disposition; 

Violation found[A]: [Empty]; Other/Resolved before decision[B]: 

[Empty]; Total: [Empty].



Consumer protection laws: Consumer Product Safety Commission; Violation 

found[A]: 0; Other/Resolved before decision[B]: 0; Total: 0.



Consumer protection laws: Federal Trade Commission; Violation found[A]: 

[Empty]; Other/Resolved before decision[B]: [Empty]; Total: [Empty].



Consumer protection laws: Civil; Violation found[A]: 0; Other/Resolved 

before decision[B]: 4; Total: 4.



Consumer protection laws: Administrative[C]; Violation found[A]: 0; 

Other/Resolved before decision[B]: 9; Total: 9.



Consumer protection laws: Total; Violation found[A]: 0; Other/Resolved 

before decision[B]: 13; Total: 13.



[A] Violation found - An adjudicated federal court or administrative 

decision found a violation of law. :



[B] Other/Resolved before decision - Cases that did not involve a 

determination of law violation, cases where no violation was found, 

cases closed before a decision was made by a federal court or 

administrative adjudicator (such as administrative agreements and 

consent orders), and cases that were otherwise closed/resolved. :



[C] FTC administrative cases include ALJ and Commission decisions.



Source: GAO analysis of enforcement agency data.



[End of table]



No Federal Contractors Had an Adjudicated Violation of Federal Tax 

Laws:



The Internal Revenue Service (IRS) is a branch of the Department of the 

Treasury and administers the Internal Revenue Code enacted by Congress. 

IRS records as unpaid taxes or assessments amounts that taxpayers have 

identified that they owe but have not paid in tax returns they file, 

and amounts it determines are owed by taxpayers through its various 

enforcement programs. IRS can make formal deficiency assessments of 

tax, penalties, and interest.



Penalties levied by IRS are meant to encourage voluntary compliance 

with the Internal Revenue Code. By law, IRS imposes penalties against 

taxpayers for such things as failure to properly deposit employment 

taxes, failure to pay tax by the applicable due date, failure to file a 

tax return, and underpaying quarterly estimated taxes. Taxpayers may 

choose to pay the penalty, challenge the penalty assessment within IRS, 

negotiate a compromise, or await enforcement action through the 
judicial 

process.[Footnote 38] IRS levies these penalties administratively; but 

the assessment itself is not the result of an administrative 

adjudication process, such as through an ALJ.



IRS does not handle civil or criminal tax law cases; this is done by 

DOJ, which maintains the records on all closed cases, whether 

adjudicated in the U.S. Tax Court, the Court of Federal Claims, or the 

U.S. District Court. IRS does, however, track the payment status of 

those taxpayers owing taxes or assessed penalties in its accounts 

receivables. These are the data we matched against GSA’s FPDS list of 

contractors to identify contractors with at least one tax-related 

penalty.[Footnote 39]



During tax periods covering fiscal years 1997 through 1999, 7,864 of 

13,058 contractors[Footnote 40] were assessed at least one penalty by 

IRS during this period. IRS assessed the penalties against the 7,864 

contractors administratively; but because these assessments themselves 

were not the result of formal adjudication, we did not count these 

cases in our tally of enforcement agency cases. However, we searched 

the DOJ data for tax cases it handled. We matched no contractors to tax 

cases that were closed by DOJ during fiscal years 1997 through 1999 

where a court decision found the contractor had violated federal tax 

laws. We matched one contractor, a security services company, to a case 

handled by DOJ where a stipulated judgment was entered in federal court 

in which the company, as successor-in-interest of the taxpayer (whose 

assets and business had been acquired by the company), agreed to pay 

$170,000 in full satisfaction of its predecessor’s unpaid tax 

liability.



According to an IRS chief counsel official, large corporations, which 

include many government contractors, almost universally run afoul of 

some tax law provision, which could result in a penalty assessment. Of 

the 7,864 contractors we matched to a penalty, 75 percent had each been 

assessed one or more penalties totaling under $11,000. The median 

amount that contractors were assessed for one or more penalties was 

$1,944. About 2 percent, or 138 of the 7,864 contractors, had been 

assessed more than $1 million in penalties--one-fourth of these were 

Fortune 500 companies, and one-fifth were state and local agencies or 

universities.[Footnote 41]



FAR Rule Implementation Issues Identified in Determining Incidence of 

Law Violations by Contractors:



The numerous public comments on the FAR rule, as well as the FAR 

Council’s published analysis and discussion of these comments, 

identified and addressed numerous FAR rule implementation issues. 

However, in this report we are limiting our analysis and reporting of 

implementation issues under the revoked FAR rule to those we identified 

in determining the incidence of contractor law violations. We found 

that few contractors in our review would have actually had to report 

past violations in the FAR rule certification accompanying their 

offers. Additionally, contracting officers would face significant 

difficulties in verifying or obtaining contractor compliance history 

information. Moreover, the FAR rule may have created the need for 

additional record keeping by contractors in order to monitor their 

compliance histories.



As described earlier, the objective of the FAR rule was to provide 

clarifying revisions to the existing regulatory language in the FAR 

about what constitutes a satisfactory record of integrity and business 

ethics. The FAR rule stated that a satisfactory record was one that 

included satisfactory compliance with the law, specifically 

environmental, labor and employment, antitrust, consumer protection, 

and tax laws. The FAR rule also instructed contracting officers to 

consider all relevant credible information, giving the greatest weight 

to violations that have been adjudicated within the last 3 years 

preceding the prospective contractor’s offer. To provide this 

information to contracting officers, the FAR rule included a 

certification requirement that required prospective contractors to 

indicate whether they had or had not, within the past 3 years, relative 

to environmental, labor and employment, antitrust, consumer protection, 

or tax laws:



* been convicted of a federal or state felony (or had any federal or 

state indictments currently pending against them); or:



* had a federal court judgment in a civil case brought by the United 

States rendered against them; or:



* had an adverse decision by an ALJ, board, or commission indicating a 

willful violation of law.



Few Certifications Would Have Indicated Law Violations:



As discussed earlier in this report, 6,752 enforcement agency cases 

that were closed during fiscal years 1997 through 1999 involved federal 

contractors that were awarded new federal contracts of at least 

$100,000 in fiscal year 2000. From these cases, we identified 39 

contractors that were found by a court or ALJ, board, or commission 

decision to have violated federal law in the areas specified by the FAR 

rule. However, most of these contractors would not have been required 

to report the law violations to the contracting officer in the 

certification in their offers (that is, by checking the box in the 

certification indicating that the prospective contractor or its 

principals have had a violation) if they had been prospective 

contractors. As shown in table 6, based on our conceptual application 

of the revoked FAR rule’s certification criteria, 7 of the 39 

contractors would have been required to report their violations in the 

certification accompanying their offers. The violations by the other 32 

contractors did not meet the FAR rule criteria for reporting and thus 

would not have been required to be reported. For example, misdemeanor 

criminal convictions would not have been reported because the FAR rule 

required only felony convictions and indictments to be reported. 

Similarly, most of the adjudicated decisions by an ALJ, board, or 

commission would not have been reported because the decisions did not 

find a “willful” violation of the law, the criterion in the FAR rule 

certification. Willfulness is a specific legal standard that excludes 

less serious or inadvertent violations of law. For example, in 30 of 

the 34 NLRB cases we matched to contractors, NLRB determined that there 

were violations of law, yet none of these violations were specifically 

determined to be “willful” violations. Indeed, our review indicated 

that in the majority of the enforcement agencies’ administrative cases, 

the determination of “willfulness” was not involved at all.



Table 6: Federal Contractors That Would Have Been Required to Report a 

Law Violation in the Certification in Their Offers under Our Conceptual 

Application of the FAR Rule:



Areas of law covered by the FAR rule: Environmental; Number of 

contractors matched with violations[A]: 11; Number of matched 

contractors with reportable violations[B]: 5.



Areas of law covered by the FAR rule: Labor and employment; Number of 

contractors matched with violations[A]: 27; Number of matched 

contractors with reportable violations[B]: 1.



Areas of law covered by the FAR rule: Antitrust; Number of contractors 

matched with violations[A]: 1; Number of matched contractors with 

reportable violations[B]: 1.



Areas of law covered by the FAR rule: Consumer protection; Number of 

contractors matched with violations[A]: 0; Number of matched 

contractors with reportable violations[B]: 0.



Areas of law covered by the FAR rule: Tax; Number of contractors 

matched with violations[A]: 0; Number of matched contractors with 

reportable violations[B]: 0.



Areas of law covered by the FAR rule: Total; Number of contractors 

matched with violations[A]: 39; Number of matched contractors with 

reportable violations[B]: 7.



[A] Violations found by a federal court or adjudicated administrative 

decision.



[B] Violations found by a federal court or adjudicated administrative 

decision that also met the FAR rule certification criteria.



Source: GAO analysis.



[End of table]



In addition, administrative agreements or settlements resolving cases 

were not reportable under the FAR rule’s certification requirement. 

Even if such agreements were incorporated into a judicial or 

administrative order, they did not constitute a decision rendered 

against the contractor by a court or administrative adjudicator finding 

a violation of law; rather, they constituted the contractor’s and the 

government’s agreement on resolving the matter--typically without an 

admission of wrongdoing by the contractor. Although the FAR rule 

guidance stated that contracting officers should give consideration to 

any administrative agreements entered into with prospective contractors 

who take corrective action after disclosure of an alleged law violation 

(in the initial charge or complaint filed by the enforcement agency), 

the FAR rule did not specifically require prospective contractors to 

report such agreements. Thus, it is unclear how contracting officers 

would have become aware of such agreements in making their 

responsibility determinations.



The FAR Council indicated that the certification intentionally was not 

as broad as the FAR’s responsibility standard of “a satisfactory record 

of integrity and business ethics.” The FAR Council considered the 

certification as an implementation measure designed to provide the 

contracting officer with the information that the FAR Council 

anticipated would be most useful in making the responsibility 

determination. Thus, the FAR Council recognized the “relatively narrow 

focus” of the certification and stated that it reflected the FAR 

Council’s attempt to craft a certification that is clear and that does 

not impose an undue reporting burden on prospective contractors. 

However, it is unclear whether the “relatively narrow focus” of the 

certification was intended to be as narrow as it actually would have 

been in practice--at least in regard to adjudicated administrative 

decisions and administrative agreements and settlements. Further, it is 

not clear how contracting officers were supposed to consider all 

relevant credible information about a prospective contractor’s 

compliance history, even that limited to adjudicated decisions, when 

such limited information would have been required to be reported by 

contractors.



Contracting Officers Would Face Significant Difficulties Verifying or 

Obtaining Contractor Compliance Histories:



The FAR rule required contracting officers to consider all relevant 

credible information regarding a contractor’s compliance history in 

determining whether a prospective contractor had a satisfactory record 

of integrity and business ethics in order to make a responsibility 

determination. As discussed above, the FAR rule established a 

certification in which prospective contractors report certain 

compliance information. However, unless reported by prospective 

contractors themselves, contracting officers would face significant 

difficulties obtaining or verifying compliance history information on 

prospective contractors that are eligible for competing for government 

contracts.



A large majority of the 32 contracting officers we contacted from the 

agencies covered by our review reported that they did not have timely 

access to enforcement agency databases that captured prospective 

contractors’ compliance history information. Although a large majority 

of these contracting officers also reported that they use GSA’s list of 

debarred contractors[Footnote 42] as a source of information for 

evaluating a prospective contractor’s record of compliance with laws 

and regulations, this list does not contain compliance history 

information on prospective contractors that have not been debarred or 

suspended, that is, those that are eligible to compete for government 

contracts (the vast majority of prospective contractors).[Footnote 43] 

Some compliance information is accessible by the public on the World 
Wide Web 

(Web) sites maintained by some enforcement agencies, such as EPA, NLRB, 
OSHA, 

CPSC, and FTC. Although we were able to use some of these Web sites, 
few of 

the contracting officers reported that they routinely used such sites. 
A 

contracting officer would have to first know which agency was 
responsible for 

an enforcement area and then spend time locating the relevant portion 
of 

the Web site before attempting to locate compliance information or to 

perform a query.



However, even with access to enforcement agency databases and Web 

sites, contracting officers would still run into some of the same 

challenges we faced matching contractors to enforcement cases. The case 

information contained in enforcement agency databases and Web sites was 

not posted for the specific purpose of assisting contracting officers 

in considering federal contractors’ compliance records. Generally, the 

only common identifier between federal enforcement agencies and 

prospective contractors for matching purposes is the company name. The 

name-matching process can be imprecise (described in detail in app. I) 

and requires us to perform numerous sorts/matches to test and compare 

numerous variations in the spelling or configuration of company names. 

Further, the amount of relevant enforcement case information varied 

widely and was often limited.



There is no comprehensive and centralized resource providing 

contracting officers with compliance history information on prospective 

contractors eligible to compete for government contracts.[Footnote 44] 

While enforcement agency databases and Web sites may be available in 

some cases that can be used for obtaining or verifying prospective 

contractors’ compliance history, the attempted use by contracting 

officers of such resources (especially on a routine basis) could be, 

based on our experience, difficult and extremely time consuming. This 

is because of the numerous enforcement agencies involved, the 

difficulties inherent in the matching process, the varying amounts of 

information available, and any necessary follow-up and analysis of 

compliance information from such sources that a contracting officer 

would have to make in determining a prospective contractor’s 

responsibility.



Additional Record Keeping by Contractors May Have Been Necessary:



The FAR rule would have amended the existing “Certification Regarding 

Debarment, Suspension, Proposed Debarment, and Other Responsibility 

Matters,” which covers such things as whether the prospective 

contractor or its principals are presently debarred or have had a 

conviction for contract fraud. This certification contains language 

informing prospective contractors that nothing in the certification 

should be construed to require establishment of a system of records in 

order to render, in good faith, the required certification. However, 

the FAR Council, in addressing the paperwork burden of the rule, 

acknowledged that implementation of the FAR rule would probably require 

most large businesses and some small businesses to establish a new 

system or to augment a current system to track compliance with 

applicable laws. Further, as described above, in later suspending the 

rule, the FAR Council stated that the rule’s effective date did not 

give prospective contractors sufficient time to establish such a system 

and keep it current in order to properly fill out the certification. In 

fact, 18 of the 43 federal contractors who responded to our attempts to 

verify their involvement in enforcement agency cases reported that they 

did not currently have the capability to identify or track the various 

types of enforcement actions taken against them.



Agency Comments and Our Evaluation:



We provided copies of a draft of this report to the heads of DOL, EPA, 

DOJ, FTC, CPSC, NLRB, IRS, DOD, NASA, and GSA and to the Administrator 

for Federal Procurement Policy, OMB, for their review and comments. DOJ 

(Civil Division, Civil Rights Division, Executive Office for U.S. 

Attorneys, Environment and Natural Resources Division, and Criminal 

Division), CPSC, IRS, DOD, NASA, GSA, and OMB had no comments. Program 

officials in DOL, EPA, DOJ’s Antitrust Division, FTC, and NLRB provided 

written or oral technical comments that we incorporated in this report 

as appropriate.



Unless you publicly announce the contents of this report earlier, we 

plan no further distribution of its contents until 30 days from the 

date of this report. We will then send copies of this report to the 

Chairman and Ranking Minority Member, House Committee on Government 

Reform; Ranking Minority Member, Subcommittee on Technology and 

Procurement Policy; and Ranking Minority Member, Subcommittee on 

Government Efficiency, Financial Management, and Intergovernmental 

Relations, House Committee on Government Reform; Chairman and Ranking 

Minority Member, Senate Committee on Appropriations; Chairman and 

Ranking Minority Member, House Committee on Appropriations; and 

Chairman and Ranking Minority Member, Senate Committee on Governmental 

Affairs. Copies of this report will also be sent to the Director of 

OMB; the Secretary of Labor; the Administrator of EPA, the Chairman of 

FTC, the Commissioner of Internal Revenue, the Chairman of NLRB, the 

Chairman of CPSC, and the Attorney General. We are also sending copies 

to the Administrator for Federal Procurement Policy and the Secretary 

of Defense, the Administrator of NASA, and the Administrator of GSA. 

Copies will be made available to others upon request. In addition, this 

report will be available at no charge on the GAO Web site at http://

www.gao.gov. If you have any questions, please contact me at (202) 512-

2834 or ungarb@gao.gov.



Major contributors to this report are acknowledged in appendix III.



Signed by Bernard L. Ungar:



Bernard L. Ungar

Director, Physical Infrastructure Issues:



[End of section]



Appendix I: Objectives, Scope, and Methodology:



As discussed in this report, the objectives of this assignment were to 

determine:



* the extent to which federal contractors had violated federal 

environmental, labor and employment, antitrust, consumer protection, 

and tax laws; and:



* issues surrounding the implementation of the now-revoked Federal 

Acquisition Regulation rule (“the FAR rule”) on contractor 

responsibility[Footnote 45] that we identified in response to the first 

objective.



To quantify the extent to which federal contractors had violated 

federal environmental, labor and employment, antitrust, consumer 

protection, and tax laws, we did the following:



* We focused on contractors that were awarded new federal contracts in 

amounts expected to be at least $100,000 per contract and federal 

enforcement agency cases closed during fiscal years 1997 through 

1999[Footnote 46] because these were the types of contracts and cases 

that would have been covered by the FAR rule’s contractor certification 

requirement if it had been applied beginning with fiscal year 2000, 

and:



* We used federal court or administrative decisions in determining 

whether a case involving a contractor resulted in an actual adjudicated 

determination of a violation of federal environmental, labor and 

employment, antitrust, consumer protection, or tax laws[Footnote 47] 

because these were the types of adjudicated decisions contracting 

officers were instructed by the FAR rule to give the greatest weight in 

making their responsibility determinations.



Using these criteria, we performed computerized matches between 

contractors (names or numeric identifiers where available) listed in 

the Federal Procurement Data System (FPDS) maintained by the General 

Services Administration (GSA) as having new federal contracts awarded 

in fiscal year 2000 and names or identifiers in cases closed during 

fiscal years 1997, 1998, and 1999 listed in the databases maintained by 

seven federal agencies responsible for enforcing or administering 

federal environmental, labor and employment, antitrust, consumer 

protection, or tax laws.[Footnote 48] Although the FAR rule also 

included the consideration of certain state law violations, as agreed 

with the requestors, we included only federal law violations in our 

review based on federal court and administrative adjudications.



Our matching process involved three steps: (1) identifying and 

obtaining the appropriate databases and assessing the reliability of 

these databases, (2) performing computerized matches of contractors, 

and (3) verifying the accuracy of selected matches. We then reviewed a 

selection of cases in detail to provide descriptions and examples of 

these cases.



* Identifying and obtaining the databases: From each relevant agency or 

division, we obtained data dictionaries describing the variables 

maintained in the database or databases used to track enforcement cases 

and reviewed these dictionaries for variables relevant to the process 

of matching cases to the FPDS database of contractors. From this 

review, along with discussions with officials at each agency, we 

determined the records and types of variables needed from each database 

for fiscal years 1997 through 1999, including the following:



* variables to aid in matching names of parties in enforcement agency 

cases to the contractor database (i.e., name, address, taxpayer 

identification number (TIN) or data universal numbering system (DUNS) 

number);



* variables to aid in identifying the particular case in question for 

further review (i.e., case identification number, court docket number, 

case opening and closing dates); and:



* variables to aid in describing the nature and severity of the case 

(i.e., type of alleged violation, outcome of case, penalties or fines 

assessed, any available narrative description of the alleged violation 

and case).



We clarified any uncertainties about appropriate processing of the 

databases and interpretation of the variables through discussions with 

agency and division contacts. For agencies without appropriate 

electronic data available, we obtained case information through agency 

Web sites or from hard copies of reports.



To assess the reliability of the data used for matching purposes in our 

report, including the FPDS, we (1) reviewed existing documentation 

related to the data sources and (2) electronically tested the data to 

identify obvious problems with completeness or accuracy. We determined 

that the data were reliable enough for the purposes of this report. GSA 

has stated that the figures produced from the FPDS are only as 

accurate, timely, and complete as the data provided by the reporting 

agencies.



* The matching process: In an effort to determine the number of 

contractors with adjudicated violations of federal environmental, 

labor, antitrust, consumer protection, and tax laws in fiscal years 

1997 through 1999 and that received a federal contract in fiscal year 

2000, we matched each enforcement agency’s case data for fiscal years 

1997 through 1999 against the FPDS fiscal year 2000 contractor data. 

The fiscal year 2000 FPDS data maintained by GSA consisted of 162,212 

unique contracts; 82,622 unique contractor names; 58,711 TINs and 

67,275 DUNS numbers. From the database received, we selected new 

contracts awarded in fiscal year 2000 that had total obligations of at 

least $100,000 during the fiscal year by summing the dollar amounts for 

all such records having the same contract number. This database 

contained 29,032 unique contracts; 16,819 unique contractor names; 

14,318 unique TINs; and 16,506 unique DUNS numbers.[Footnote 49]



Before matching, we checked agency data to ensure the case closed dates 

were within the period fiscal years 1997 through 1999 and checked the 

validity of certain fields, such as the fields containing the TINs, 

DUNS, or closed dates. We further examined the agencies’ data and had 

additional discussions with agencies’ officials to determine which 

variable(s) should be used to perform the matches and manipulated the 

databases as needed to obtain final databases with one name or 

identifier per record.



When available in an agency database, we matched on numeric 

identifiers, that is, TINs, DUNS, or both.



When matching contractors’ names, we found a wide variation in the way 

names were spelled and abbreviated across databases. To compensate for 

these variations, we developed computer programs aimed at making these 

names as standard as possible by removing words--such as “Inc.,” “Co.,” 

“Company,” “Jr.,” “LTD,” etc.--at the end of a field for all databases 

in the name-matching process. Removing such words increased the chance 

of a match between FPDS and agency data. Specifically, matches resulted 

when a name in the FPDS database was spelled exactly like the name in 

the agency database. If the company name was not spelled identically in 

both databases, it would not have been identified as a match. For 

example, if one database contained the name “ABC” and another contained 

“A Better Company,” a match would not have been identified. Due to time 

and resource limitations, we could not correct inconsistencies, 

misspellings or abbreviations to improve the matching process.[Footnote 

50]



For each agency we determined the base numbers of identifiers used for 

matching: the number of unique names (i.e., companies’ names) in 

federal enforcement agency cases after our standardization process, the 

number of unique DUNS numbers, and the number of unique TINs. For 

agencies that tracked criminal, civil, and/or administrative cases 

separately (EPA, DOL’s Pension and Welfare Benefits Administration, 

DOJ’s Environment and Natural Resources Division, and the Executive 

Office for U.S. Attorneys), we processed these case types separately. 

After the matching process, we determined the number of matches with a 

unique identifier (name or number) and the number of unique contractor/

case matches. Databases often contained more than one name considered 

to be part of one case; in those instances, we determined the number of 

matches on the case level. Within the agencies or divisions that 

tracked criminal, civil, and/or administrative cases separately, we 

added the matches found. Therefore, for these agencies or divisions, 

there could be duplicate contractors within the matched cases.



* Verifying the accuracy of selected matches: For most agency databases 

used in this analysis, there was no common numeric identifier available 

for matching federal contractors to names in enforcement agency cases. 

The matching process therefore was often limited to attempting name 

matches. Due to the imprecise nature of name matching, we know that we 

have errors, both in missing true matches that are likely in the 

database, and in calling two companies a match when in fact they are 

not the same company. This latter error can occur for a variety of 

reasons as well, such as two distinct companies actually having the 

same name, or abbreviations or misspellings of one company name making 

it look identical to another when in fact it is not. Even when we were 

able to match using numbers, such as DUNS or TIN, errors in data entry-

-for either agency or FPDS data--could lead to missing true matches or 

identifying false matches. Although there is no way to determine how 

many true matches we missed--if we could determine them, we would then 

be able to call them matches--it is possible, and perhaps useful, to 

make some kind of assessment of our “false positives,” that is, name 

matches that were in fact not the same company.



Although verification of a representative sample of the matches would 

be desirable, this approach was untenable, given the time and resources 

available. However, we looked at the false positive cases we found in 

doing our case file reviews (see below for methodology details of this 

review). For all cases in which it appeared that the contractor was 

found by an federal court or adjudicated administrative decision to 

have violated the law, as well as for a selection of the remaining 

enforcement agency cases (involving compliance actions) chosen on the 

basis of the highest dollar contract award amounts for fiscal year 

2000, we determined whether we had made a valid match between 

contractor and enforcement agency case by contacting the named 

contractor. This match rate, however, cannot be viewed as an unbiased 

estimate because the selection of cases was not randomly chosen and, 

for most agencies, was not a large enough selection of cases. The rate, 

however, does provide some information for understanding how successful 

our matching process was. Table 7 summarizes the number of false 

matches found in these case file reviews.



Table 7: Percent of False Matches for Cases Reviewed:



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Safety and Health Administration; Number of: Department of Labor 

Offices:: 1,156; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: 41; Number of false matches in reviewed 

cases: Department of Labor Offices:: 11; Percent of false matches for 

cases reviewed: Department of Labor Offices:: 27.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Federal Contract Compliance Programs; Number of: Department of 

Labor Offices:: 178; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: 24; Number of false matches in reviewed 

cases: Department of Labor Offices:: 0; Percent of false matches for 

cases reviewed: Department of Labor Offices:: 0.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Wage and Hour Division; Number of: Department of Labor Offices:: 

1,531; Number of matched contractors’ cases reviewed: Department of 

Labor Offices:: 16; Number of false matches in reviewed cases: 

Department of Labor Offices:: 0; Percent of false matches for cases 

reviewed: Department of Labor Offices:: 0.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Pension and Welfare Benefits Administration; Number of: 

Department of Labor Offices:: 1; Number of matched contractors’ cases 

reviewed: Department of Labor Offices:: 1; Number of false matches in 

reviewed cases: Department of Labor Offices:: 0; Percent of false 

matches for cases reviewed: Department of Labor Offices:: 0.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Subtotal; Number of: Department of Labor Offices:: 2,866; Number 

of matched contractors’ cases reviewed: Department of Labor Offices:: 

82; Number of false matches in reviewed cases: Department of Labor 

Offices:: 11; Percent of false matches for cases reviewed: Department 

of Labor Offices:: N/A.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Department of Justice Divisions:; Number of: Department of Labor 

Offices:: [Empty]; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: [Empty]; Number of false matches in 

reviewed cases: Department of Labor Offices:: [Empty]; Percent of false 

matches for cases reviewed: Department of Labor Offices:: [Empty].



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Antitrust; Number of: Department of Labor Offices:: 5; Number of 

matched contractors’ cases reviewed: Department of Labor Offices:: 5; 

Number of false matches in reviewed cases: Department of Labor 

Offices:: 1; Percent of false matches for cases reviewed: Department of 

Labor Offices:: 20.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Environment and Natural Resources; Number of: Department of Labor 

Offices:: 70; Number of matched contractors’ cases reviewed: Department 

of Labor Offices:: 18; Number of false matches in reviewed cases: 

Department of Labor Offices:: 1; Percent of false matches for cases 

reviewed: Department of Labor Offices:: 6.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Civil Rights; Number of: Department of Labor Offices:: 3; Number 

of matched contractors’ cases reviewed: Department of Labor Offices:: 

3; Number of false matches in reviewed cases: Department of Labor 

Offices:: 0; Percent of false matches for cases reviewed: Department of 

Labor Offices:: 0.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Executive Office of the U.S. Attorneys; Number of: Department of 

Labor Offices:: [Empty]; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: [Empty]; Number of false matches in 

reviewed cases: Department of Labor Offices:: [Empty]; Percent of false 

matches for cases reviewed: Department of Labor Offices:: [Empty].



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Criminal[A]; Number of: Department of Labor Offices:: 22; Number 

of matched contractors’ cases reviewed: Department of Labor Offices:: 

36; Number of false matches in reviewed cases: Department of Labor 

Offices:: 26; Percent of false matches for cases reviewed: Department 

of Labor Offices:: 72.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Civil; Number of: Department of Labor Offices:: 40; Number of 

matched contractors’ cases reviewed: Department of Labor Offices:: 23; 

Number of false matches in reviewed cases: Department of Labor 

Offices:: 4; Percent of false matches for cases reviewed: Department of 

Labor Offices:: 16.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Subtotal; Number of: Department of Labor Offices:: 140; Number of 

matched contractors’ cases reviewed: Department of Labor Offices:: 85; 

Number of false matches in reviewed cases: Department of Labor 

Offices:: 32; Percent of false matches for cases reviewed: Department 

of Labor Offices:: N/A.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Environmental Protection Agency; Number of: Department of Labor 

Offices:: [Empty]; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: [Empty]; Number of false matches in 

reviewed cases: Department of Labor Offices:: [Empty]; Percent of false 

matches for cases reviewed: Department of Labor Offices:: [Empty].



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Criminal[A]; Number of: Department of Labor Offices:: 12; Number 

of matched contractors’ cases reviewed: Department of Labor Offices:: 

27; Number of false matches in reviewed cases: Department of Labor 

Offices:: 11; Percent of false matches for cases reviewed: Department 

of Labor Offices:: 41.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Civil; Number of: Department of Labor Offices:: 148; Number of 

matched contractors’ cases reviewed: Department of Labor Offices:: 16; 

Number of false matches in reviewed cases: Department of Labor 

Offices:: 1; Percent of false matches for cases reviewed: Department of 

Labor Offices:: 6.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Administrative; Number of: Department of Labor Offices:: 290; 

Number of matched contractors’ cases reviewed: Department of Labor 

Offices:: 29; Number of false matches in reviewed cases: Department of 

Labor Offices:: 0; Percent of false matches for cases reviewed: 

Department of Labor Offices:: 0.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Subtotal; Number of: Department of Labor Offices:: 450; Number of 

matched contractors’ cases reviewed: Department of Labor Offices:: 72; 

Number of false matches in reviewed cases: Department of Labor 

Offices:: 12; Percent of false matches for cases reviewed: Department 

of Labor Offices:: N/A.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: National Labor Relations Board[A]; Number of: Department of Labor 

Offices:: 32; Number of matched contractors’ cases reviewed: Department 

of Labor Offices:: 37; Number of false matches in reviewed cases: 

Department of Labor Offices:: 3; Percent of false matches for cases 

reviewed: Department of Labor Offices:: 8.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Consumer Product Safety Commission; Number of: Department of 

Labor Offices:: 2; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: 2; Number of false matches in reviewed 

cases: Department of Labor Offices:: 2; Percent of false matches for 

cases reviewed: Department of Labor Offices:: 100.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Federal Trade Commission[A]; Number of: Department of Labor 

Offices:: 37; Number of matched contractors’ cases reviewed: Department 

of Labor Offices:: 38; Number of false matches in reviewed cases: 

Department of Labor Offices:: 3; Percent of false matches for cases 

reviewed: Department of Labor Offices:: 8.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Internal Revenue Service; Number of: Department of Labor 

Offices:: N/A; Number of matched contractors’ cases reviewed: 

Department of Labor Offices:: N/A; Number of false matches in reviewed 

cases: Department of Labor Offices:: N/A; Percent of false matches for 

cases reviewed: Department of Labor Offices:: N/A.



Enforcement agency/division responsible for enforcing federal 

environment, labor/employment, antitrust, consumer protection and tax 

laws: Total[B]; Number of: Department of Labor Offices:: 3,527; Number 

of matched contractors’ cases reviewed: Department of Labor Offices:: 

316; Number of false matches in reviewed cases: Department of Labor 

Offices:: 63; Percent of false matches for cases reviewed: Department 

of Labor Offices:: 20.



[A] The number of cases reviewed is larger than the number of 

contractors matched because some contractors had multiple cases 

reviewed.



[B] Represents the total number of times each contractor is listed in 

each of the agency databases; thus, contractors listed in more than one 

database will be counted more than once in this total number. As 

reported earlier in this report, we matched 3,442 unique contractor 

names to 6,752 cases. :



Source: GAO analysis of GSA and enforcement agency data.



[End of table]



* Detailed case review: For a selection of the federal contractors 

matched with enforcement agency cases during the time frame, we 

contacted matched contractors in order to verify the match, request 

information regarding the case, and gather information regarding 

implementation issues surrounding the FAR rule as it would have applied 

to federal contractors. We also requested information about the cases 

from each enforcement agency. Within the matched cases from each 

agency’s database, we reviewed (1) all cases where it appeared that the 

contractor would have been required to certify to its noncompliance 

with the law under the FAR rule and (2) a selection of at least 10 

contractor cases chosen on the basis of the highest dollar contract 

award amounts during fiscal year 2000. Contract award amounts reflected 

the total dollars obligated for a new contract awarded to a contractor 

in fiscal year 2000, based on the FPDS database. For those databases 

where there were only a small number of matches, such as in the case of 

the DOJ’s Antitrust Division, all cases were reviewed rather than those 

showing the highest total dollars obligated.



We also attempted to verify enforcement agency case information with 

contractors and to obtain more detailed information about the case 

characteristics from them. We called the company and asked for the 

contracting and/or procurement office. In some cases, we were referred 

to the company’s legal department. After explaining our mission, we set 

up an appointment with the cognizant official from each company that 

agreed to discuss the matter with us. To prepare the official for the 

interview we faxed a list of questions, and, upon request, a copy of 

the Federal Register notice of the FAR rule. We then interviewed each 

official via telephone and in some cases received written responses. 

During the telephone interviews, we verified the company’s information, 

including its address and DUNS number, the contract information we had 

obtained from the FPDS, and the case information we had obtained from 

our respective enforcement agencies. When a match was determined to be 

correct, we used the case in describing the characteristics of the 

enforcement agency cases involving contractors that had been closed 

during fiscal years 1997 through 1999.



To identify issues surrounding the implementation of the FAR rule from 

our work, we compared the names in enforcement agency cases that we 

matched to the federal contractors covered by our review to the FAR 

rule certification requirement. We also considered conceptually whether 

the contractors would have been required to report the violations in 

the certifications accompanying their offers if they had been 

prospective contractors. Additionally, we discussed implementation 

issues regarding the FAR rule with (1) agency contracting officers and 

other officials from the seven federal enforcement agencies included in 

our review and (2) contractors involved in the enforcement agency cases 

that we selected for detailed review. Through these discussions, we 

identified access that contracting officers have to the compliance 

history of prospective contractors and contractor record keeping as 

implementing issues arising from the FAR rule. Finally, we discussed 

the results of our work with officials from the seven federal 

enforcement agencies and OMB, as well as with FAR Council members. We 

conducted our work from July 2000 through October 2002 in accordance 

with generally accepted government auditing standards.



[End of section]



Appendix II: Agency Cases Where a Law Violation Was Found by a Federal 

Court or Adjudicated Administrative Decision:



[See PDF for image]



Note: This appendix lists criminal cases from enforcement agencies 

where the contractor pled guilty (or no contest), a plea agreement was 

reached, or the contractor was otherwise convicted, and civil and 

administrative cases from enforcement agencies where a violation of law 

was determined by a court or adjudicated administrative decision. :



[A] Fiscal year 2000 federal contract amount is the total dollars (in 

thousands) obligated during fiscal year 2000 as shown in GSA’s Federal 

Procurement Data System file information.



Source: GAO analysis of enforcement agency data.



[End of section]



Appendix III: GAO Contacts and Staff Acknowledgments:



GAO Contacts:



Bernard L. Ungar (202) 512-2834

Sherrill H. Johnson (214) 777-5600:



Acknowledgments:



In addition to those named above, Michael Rives, Tyra DiPalma-Vigil, 

Syrene Mitchell, Derrick Collins, Adam Couvillion, Ray Occhipinti, Bill 

Scott, Elwood White, Adam Vodraska, Delois Richardson, Michele Fejfar, 

Susan Wallace, and Donna Leiss made key contributions to this report.



FOOTNOTES



[1] 10 U.S.C. § 2305(b) (3) and (4) (C); 41 U.S.C.§ 253b (c) and (d) 

(3).



[2] FAR, 48 C.F.R. § 9.103(a).



[3] 41 U.S.C. § 403(7).



[4] Federal Acquisition Regulation; Contractor Responsibility, Labor 

Relations Costs, and Costs Relating to Legal and Other Proceedings, 65 

Fed. Reg. 80,256-80,266 (Dec. 20, 2000).



[5] For our purposes, each individual contract had to be a new contract 

awarded during fiscal year 2000 with $100,000 or more obligated against 

it at that time.



[6] We identified pertinent enforcement agencies by referring to 

statutes and regulations in the environmental, labor and employment, 

antitrust, consumer protection, and tax areas; consulting with agency 

officials; and reviewing the U.S. Government Manual enforcement agency 

Web sites and our past products.



[7] The total number of enforcement agency cases includes all cases 

closed by those agencies during the applicable time period. However, 

for some agencies not all of the cases involved enforcement actions. 

For example, DOJ’s Executive Office for U.S. Attorneys tracks other 

types of cases handled by local U.S. Attorneys reflecting the wide 

variety of types of litigation in which the United States is 

necessarily involved. Further, for some agencies, not all of these 

cases involved determinations of law violations. For example, 

Environmental Protection Agency (EPA) “Superfund” cases included in the 

total number of enforcement agency cases we reported typically do not 

involve determinations of law violations but rather the assessment of 

liability for hazardous waste cleanup costs under the Comprehensive 

Environmental Response, Compensation and Liability Act.



[8] We limited our review to cases closed by enforcement agencies 

because these cases reflected final dispositions and because of 

limitations in obtaining information relating to ongoing litigation or 

enforcement actions. Some cases that may have been covered by the FAR 

rule, such as adverse district court or administrative law judge 

rulings, may have remained open in an enforcement agency’s records 

where the contractor was appealing the decision or continuing with 

further adjudicatory proceedings. Such cases were not included in our 

review.



[9] The laws involved are those enforced or administered by the seven 

federal agencies we identified and which provided us data on their 

closed cases. The seven federal agencies are EPA, the Department of 

Labor (DOL), the Department of Justice (DOJ), the National Labor 

Relations Board (NLRB), the Federal Trade Commission (FTC), the 

Consumer Product Safety Commission (CPSC), and the Internal Revenue 

Service (IRS).



[10] The FAR is prepared, issued, and maintained; and the FAR system is 

prescribed jointly by the Secretary of Defense, the Administrator of 

GSA, and the Administrator of the National Aeronautics and Space 

Administration (NASA), who, with the Administrator for Federal 

Procurement Policy, are the members of the FAR Council. The FAR system 

was established for implementing uniform policies and procedures for 

acquisitions by all executive agencies.



[11] Appendix II provides a description of criminal cases from 

enforcement agencies where the contractor pled guilty (or no contest), 

a plea agreement was reached, or the contractor was otherwise 

convicted, and civil and administrative cases from enforcement agencies 

where a violation of law was determined by a court or adjudicated 

administrative decision.



[12] The term “responsible source” is defined at 41 U.S.C. § 403(7) as 

a prospective contractor who has (or has the ability to obtain) 

adequate financial resources to perform the contract, the necessary 

organization, experience, accounting and operational controls, and 

technical skills, as well as the necessary production, construction, 

and technical equipment and facilities; is able to comply with the 

required or proposed delivery or performance schedule; has a 

satisfactory performance record; has a satisfactory record of integrity 

and business ethics; and is otherwise qualified and eligible to receive 

an award under applicable law and regulation. Under the FAR, no 

purchase or award shall be made unless the contracting officer makes an 

affirmative determination of responsibility. The FAR requires that in 

the absence of information clearly indicating that the prospective 

contractor is responsible, the contracting officer shall make a 

determination of nonresponsibility. Further, the FAR states that a 

prospective contractor must affirmatively demonstrate its 

responsibility.



[13] Federal Acquisition Regulation; Contractor Responsibility, Labor 

Relations Costs, and Costs Relating to Legal and Other Proceedings, 65 

Fed. Reg. 80,256 - 80,266 (Dec. 20, 2000). The FAR rule was based on an 

earlier proposed rule (65 Fed. Reg. 40,830 - 40,834 (June 30, 2000)), 

which replaced the proposed rule published on July 9, 1999 (64 Fed. 

Reg. 37,360 - 37,361). The FAR rule would have also revised cost 

principles to disallow charging to the government the costs of 

influencing unionization decisions and litigating proceedings brought 

by the government if there is a finding that the contractor violated 

law or regulation. These cost principle provisions are not addressed in 

this report.



[14] The term “offer” means the “bid” or “proposal” submitted by a 

prospective contractor in response to a solicitation issued by the 

government.



[15] FAR, 48 C.F.R. § 52.209-5, Certification Regarding Debarment, 

Suspension, Proposed Debarment, and Other Responsibility Matters for 

noncommercial item solicitations, and FAR, 48 C.F.R. § 52.212-3(h), 

Certification Regarding Debarment, Suspension or Ineligibility for 

Award for commercial item solicitations.



[16] The FAR authorizes certain simplified acquisition procedures for 

the acquisition of supplies and services the aggregate amount of which 

does not exceed the simplified acquisition threshold of $100,000.



[17] This existing certification predates the FAR rule, was effective 

concurrently with (as modified by) the FAR rule, and still currently 

applies to prospective contractors notwithstanding the revocation of 

the FAR rule.



[18] “Principals” for purposes of the certification means officers, 

directors, owners, partners, and persons having primary management or 

supervisory responsibilities within a business entity (such as a 

general manager).



[19] FAR, 48 C.F.R. § 1.404. GSA and several other agencies issued 

individual class deviations under this authority.



[20] The stay had the effect of restoring the previous FAR language, 

including the earlier version of the certification.



[21] See 66 Fed. Reg. 17,754-17,760 (stay and proposed revocation) 

(Apr. 3, 2001); 66 Fed. Reg. 66,984-66,991 (termination of stay and 

revocation) (Dec. 27, 2001).



[22] Suspension means action taken by the government under FAR 

procedures to temporarily disqualify a contractor from government 

contracting and government-approved subcontracting. The causes for 

suspension are listed in FAR, 48 C.F.R. § 9.407-2.



[23] Debarment means action taken by the government under FAR 

procedures to exclude a contractor from government contracting and 

government-approved subcontracting for a reasonable, specified period. 

The causes for debarment are listed in FAR, 48 C.F.R. § 9.406-2.



[24] For example, the U.S. Court of Federal Claims recently referred to 

the more extensive debarment regulations for guidance in considering 

the application of the standard for a satisfactory record of business 

ethics and integrity. Impresa Construzioni Geom. Domenico Garufi v. 

U.S., 52 Fed. Cl. 421, 425 (May 3, 2002). The Comptroller General has 

also issued a number of legal decisions over the years that consider 

the application of the business ethics and integrity standard. See, for 

example, Blocacor, LDA, B-282122.3, Aug. 2, 1999, 99-2 CPD ¶ 25 (agency 

reasonably would have found firm nonresponsible for illegal dumping of 

hazardous materials containing asbestos during performance of earlier 

contract); Service Deli, Inc., B-276251, Mar. 14, 1997, 97-1 CPD ¶ 110 

(determination by contracting officer that offeror, should it be in 

line for award, would be nonresponsible for lack of integrity is 

reasonable because of criminal conviction in connection with obtaining, 

attempting to obtain, or performing a public contract); Standard Tank 

Cleaning Corp., 

B-245364, Jan. 2, 1992, 92-1 CPD ¶ 3 (contracting agency reasonably 

determined firm was nonresponsible based upon information from various 

state agencies that showed a history of environmental violations).



[25] U.S. General Accounting Office, Federal Contractors and Violations 

of Labor Law, GAO/HEHS-96-8 (Washington, D.C.: Oct. 24, 1995); and 

Occupational Safety and Health: Violations of Safety and Health 

Regulations by Federal Contractors, GAO/HEHS-96-157 (Washington, D.C.: 

Aug. 23, 1996).



[26] Since we only used closed cases, we did not review pending federal 

indictments in criminal cases (the FAR rule required pending felony 

indictments in the five areas of law to be reported by a prospective 

contractor and considered by a contracting officer). We also limited 

our review to federal criminal convictions (including plea agreements) 

reported in agency databases. The FAR rule encompassed state felony 

convictions and indictments as well. Because of time and resource 

constraints, we did not attempt to match contractor names with names of 

parties indicted or convicted in state criminal proceedings.



[27] In the administrative enforcement area an adverse decision could 

include charges or complaints by an enforcement agency alleging a law 

violation that the contractor does not contest through the adjudicatory 

process and that become final orders of the administrative tribunal. 

However, all the cases with adjudicated violations that we matched to 

contractors involved contested allegations resulting in actual 

administrative decisions on the merits.



[28] GSA’s database showed that in fiscal year 2000, 82,622 contractors 

had a total of 162,212 federal contracts in effect for goods and 

services valued at over $203 billion. Of these, 16,819 contractors were 

awarded 29,032 new federal contracts in fiscal year 2000 in amounts of 

at least $100,000 for each contract, totaling approximately $62 

billion.



[29] We identified a total of 3,442 contractors involved in the 6,752 

cases closed during fiscal years 1997 to 1999. As mentioned earlier, 

due to name variations, we likely did not identify all of the 

contractors involved in the enforcement agency cases (see app. I).



[30] We did not construe contractors as conceding or admitting to law 

violations in the administrative agreements we reviewed.



[31] These administrative actions are subject to a formal 

administrative adjudication process.



[32] The U.S. Army Corps of Engineers has environmental protection 

responsibilities for wetlands and waterways under the Rivers and 

Harbors Act and the Clean Water Act that it implements through the 

issuance of permits. Although the Corps has an administrative hearing 

process, these proceedings are not formal adjudications under the 

Administrative Procedure Act. Accordingly, we did not match with 

federal contractor names the parties involved in those proceedings. 

However, the Corps can pursue further civil or criminal action by 

referring matters to the local U.S. Attorney for litigation. Such legal 

proceedings would have been captured in our matching of DOJ 

environmental compliance cases. Civil or criminal cases referred to DOJ 

by other federal agencies with specific environmental law enforcement 

responsibilities, such as the Fish and Wildlife Service of the 

Department of the Interior (endangered species) and the Department of 

Commerce (marine sanctuaries) would also be included in the DOJ cases.



[33] Because OFCCP’s mission specifically involves equal employment 

opportunity issues among federal contractors, we did not include in our 

review the Equal Employment Opportunity Commission (EEOC), which has 

related jurisdiction over laws prohibiting discrimination in the 

workplace and, in particular, laws prohibiting discrimination in 

compensation. We did, however, match one contractor to a civil case 

brought by EEOC and tracked by DOJ. This case is reported in appendix 

II.



[34] For example, if a compliance review or complaint investigation by 

OFCCP indicates a material violation of the equal opportunity clause of 

a federal contract and if the contractor is willing to correct the 

violation or deficiency, a written conciliation agreement may be 

entered into providing for necessary remedial action. According to 

OFCCP, when a federal contractor agrees through a conciliation 

agreement to correct the compliance issue, that contractor is deemed to 

be in compliance.



[35] One of the charges in this case (see app. II for a case 

description) involved bid rigging on government contracts, which is a 

criminal antitrust violation. A prospective contractor would currently 

have to report such a criminal conviction in the certification 

accompanying its offer notwithstanding the revocation of the FAR rule 

certification.



[36] In merger cases where the merger is challenged and the competitive 

concerns are resolved before the merger is consummated (such as through 

consent orders), no law violation has occurred.



[37] Several other federal agencies have roles ensuring consumer 

product safety. For example, certain food products, drugs, and 

cosmetics are covered by the Food and Drug Administration of the 

Department of Health and Human Services; and automobiles and trucks are 

within the jurisdiction of the National Highway Traffic Safety 

Administration of the Department of Transportation. However, because 

CPSC’s jurisdiction is so broad, we limited our review to that agency.



[38] Prior to making a formal deficiency assessment of tax, penalties, 

and interest, IRS sends the taxpayer several notices of the proposed 

assessment, including a 90-day statutory notice, giving the taxpayer an 

opportunity for Tax Court review. During this period, IRS may not take 

action to collect the deficiency.



[39] The IRS data we used included only penalties outstanding at the 

time of our matching because penalties are dropped from this data 

system once they are paid. Due to privacy issues concerning IRS 

taxpayer information, we did not review contractor cases in which IRS 

assessed penalties.



[40] The universe of 13,058 contractors was different from the universe 

of contractors matched to the other agencies’ case data because we were 

able to match company taxpayer identification numbers (TIN), instead of 

company names, between IRS and GSA’s FPDS databases. Although matching 

this common denominator between the databases was more precise, the 

number of contractors meeting our criteria, which is described in 

appendix I, was smaller because, among other things, contractors or 

subsidiaries with different names may have the same TIN. As a result, 

the number of contractor names was larger than the number of TINs.



[41] These amounts are totals of outstanding accumulated assessments 

incurred by the taxpayer and may remain on IRS’s records for extended 

periods, depending on the status of collection efforts.



[42] “List of Parties Excluded from Federal Procurement and 

Nonprocurement Programs.” This list is compiled and published by GSA 

and searchable online at http://epls.arnet.gov. It contains the names 

of parties that are currently (or have been) suspended or debarred from 

doing business with the federal government as well as other relevant 

information, such as the cause of the debarment. Contracting officers 

are required to check this list prior to awarding a contract.



[43] Contracting officers themselves also provide certain information 

to the Federal Procurement Data System, a database of federal 

contractors maintained by GSA that contains a variety of information, 

such as the contractor’s name and location, agency awarding the 

contract, principal place of contract performance, and dollar amount of 

the contract awarded. This database does not contain information on 

contractors’ compliance histories.



[44] This does not necessarily mean that contracting officers are 

unable to obtain relevant contractor compliance history information. 

For example, besides sources already mentioned, a contracting officer 

may become aware of such information through other channels, such as 

from other contracting officers. See U.S. General Accounting Office, 

National World War II Memorial: Construction Contractor Selection, GAO-

02-247R (Washington, D.C.: Nov. 30, 2001) at page 6.



[45] Federal Acquisition Regulation; Contractor Responsibility, Labor 

Relations Costs, and Costs Relating to Legal and Other Proceedings, 65 

Fed. Reg. 80,256 - 80,266 (Dec. 20, 2000).



[46] These were cases provided by federal enforcement agencies in 

response to our request for data on closed cases brought by these 

agencies to enforce or administer the laws for which they are 

responsible. We identified the pertinent enforcement agencies by 

referring to statutes and regulations in the five areas of law; 

consulting with agency officials; and reviewing the U.S. Government 

Manual, enforcement agency Web sites, and our past products.



[47] The laws involved are those enforced or administered by the 

agencies we identified and which provided us data on their closed cases 

(see previous note).



[48] The seven federal agencies are the Environmental Protection Agency 

(EPA), Department of Labor (DOL), Department of Justice (DOJ), National 

Labor Relations Board (NLRB), Federal Trade Commission (FTC), Consumer 

Product Safety Commission (CPSC), and Internal Revenue Service (IRS).



[49] The database from IRS was matched to the FPDS database using only 

TINs. Unique TINs (13,072) used to match against IRS’ database were 

derived by selecting new contracts worth at least $100,000 and then 

selecting contractors that had unique TINs. The number of unique 

contractors and unique TINs differ because there could be several 

different contractor names per TIN, and any cases with invalid TINs 

were not used in the match. The different names per TIN occur from 

misspellings, mistakes, and subsidiaries using the parent company’s 

TIN.



[50] We explored other options to enable us to match contractor and 

names in enforcement agency cases that were similar and possibly the 

same company. These procedures required standardization of each word in 

each name and, ideally, a second identifier (such as state or ZIP code) 

in addition to a name to help narrow possible matches to those more 

likely to be the same company. However, a second identifier was rarely 

available in these databases. We found that a large amount of false 

matches occurred in the absence of a second identifier, and we were 

unable to develop procedures to reduce the number of false matches, 

given the time and resources available.



GAO’s Mission:



The General Accounting Office, the investigative arm of Congress, 

exists to support Congress in meeting its constitutional 

responsibilities and to help improve the performance and accountability 

of the federal government for the American people. GAO examines the use 

of public funds; evaluates federal programs and policies; and provides 

analyses, recommendations, and other assistance to help Congress make 

informed oversight, policy, and funding decisions. GAO’s commitment to 

good government is reflected in its core values of accountability, 

integrity, and reliability.



Obtaining Copies of GAO Reports and Testimony:



The fastest and easiest way to obtain copies of GAO documents at no 

cost is through the Internet. GAO’s Web site ( www.gao.gov ) contains 

abstracts and full-text files of current reports and testimony and an 

expanding archive of older products. The Web site features a search 

engine to help you locate documents using key words and phrases. You 

can print these documents in their entirety, including charts and other 

graphics.



Each day, GAO issues a list of newly released reports, testimony, and 

correspondence. GAO posts this list, known as “Today’s Reports,” on its 

Web site daily. The list contains links to the full-text document 

files. To have GAO e-mail this list to you every afternoon, go to 

www.gao.gov and select “Subscribe to daily E-mail alert for newly 

released products” under the GAO Reports heading.



Order by Mail or Phone:



The first copy of each printed report is free. Additional copies are $2 

each. A check or money order should be made out to the Superintendent 

of Documents. GAO also accepts VISA and Mastercard. Orders for 100 or 

more copies mailed to a single address are discounted 25 percent. 

Orders should be sent to:



U.S. General Accounting Office



441 G Street NW,



Room LM Washington,



D.C. 20548:



To order by Phone: 	



	Voice: (202) 512-6000:



	TDD: (202) 512-2537:



	Fax: (202) 512-6061:



To Report Fraud, Waste, and Abuse in Federal Programs:



Contact:



Web site: www.gao.gov/fraudnet/fraudnet.htm E-mail: fraudnet@gao.gov



Automated answering system: (800) 424-5454 or (202) 512-7470:



Public Affairs:



Jeff Nelligan, managing director, NelliganJ@gao.gov (202) 512-4800 U.S.



General Accounting Office, 441 G Street NW, Room 7149 Washington, D.C.



20548: