Today, Representatives Jason Chaffetz (R-UT) and Jackie Speier (D-CA) introduced H.R. 882, the Contracting and Tax Accountability Act of 2013. This bipartisan legislation prohibits companies with seriously delinquent federal tax debts from receiving new federal contracts.
"Those who consciously ignore the channels and processes in place to fulfill their tax obligations must be held accountable," said Chaffetz. "Since federal contractors draw compensation and funding from taxpayer dollars, we must ensure that they are complying with the existing laws."
"If a company can't fulfill its basic financial obligation to pay taxes, how can we expect them to be responsible with taxpayer money? We're talking about billions of dollars in unpaid taxes by government contractors -- we have to put our foot down and tell them they can't compete for contracts if they're not going to pay their bills," said Speier.
The Government Accountability Office (GAO) has reported that government contractors owed over $5 billion in unpaid federal taxes. Many of the contractors have repeatedly failed to fulfill their tax obligations and have delinquencies that extend over multiple tax periods. GAO also identified instances in which companies that are delinquent in their taxes have won contracts by submitting lower offers than companies that comply with tax obligations.
H.R. 882 is designed to mandate tax compliance as a prerequisite for receiving a federal contract. In 2008, The Federal Acquisition Regulation was revised, requiring contractors to certify that they do not have a delinquent tax debt to the federal government. This legislation would codify that regulation and provide a means to verify the contractor's certification.
An identical version of this bill (HR 829) was unanimously passed through the Oversight and Government Reform Committee during the 112th Congress. Similar legislation was also introduced in the 110th Congress by then-Senator Barack Obama.