Letter To The Honorable Martha N. Johnson, Administrator, General Services Administration

Letter

Casey Calls on GSA to Ensure Federal Dollars Kept Away from Disbarred or Suspended Contractors

U.S. Senator Bob Casey (D-PA) today sent a letter to Martha Johnson, Administrator of the U.S. General Services Administration (GSA), to inquire into the Administration's efforts to ensure that disbarred or suspended contractors are precluded from receiving federal contracts. In the letter, Senator Casey expressed his concern that such contractors may be improperly receiving federal contracts and stated his belief that all appropriate steps must be taken to address this problem.

"What we are saying here is that if you engage in illegal activity, you should be barred from receiving taxpayer dollars through contract awards," said Senator Casey. "And if the list on which bad actors are supposed to appear is flawed, we need to fix it. Corrupt entities who have violated the public trust forfeit the right to do business with the federal government, and Pennsylvanians need to have confidence that systems in place are effective at prohibiting the awarding of contracts to disbarred businesses or individuals."

Any federal agency can exclude parties from receiving federal contracts for a wide range of offenses. Excluded parties are supposed to be listed on a web-based database called the Excluded Parties List System (EPLS). This system is designed to ensure that parties on the excluded list, otherwise referred to as "disbarred" or "suspended," are ineligible to receive contract awards from the federal government.

In February 2009 the Government Accountability Office (GAO) issued a report (GAO-09-174) that detailed cases in which "businesses and individuals that have been excluded for egregious offenses ranging from national security violations to tax fraud are improperly receiving federal contracts and other funds." The cases demonstrate significant flaws in procedures designed to preclude the awarding of federal contracts to disbarred or suspended contractors. Specifically, the report found that "ineffective management of the EPLS database" and defective practices at some federal agencies contributed to disbarred entities receiving federal contracts.

Although GAO acknowledges in the report that GSA has taken some action to address these recommendations, GAO stated that it did not consider the actions taken to be sufficient to fully address the identified problems. In his letter, Senator Casey requested an update on GSA's efforts to ensure that federal contracts are not being improperly awarded to disbarred entities. In addition, Senator Casey welcomed any recommendations that GSA might have regarding the establishment of additional safeguards.

Dear Administrator Johnson:

The purpose of this letter is to inquire into the General Services Administration's efforts to ensure that disbarred or suspended contractors are precluded from receiving federal contracts. I am very concerned that such contractors may be improperly receiving federal contracts and believe that we need to take all appropriate steps to address this problem.

Any federal agency can exclude parties from receiving federal contracts for a wide range of offenses. Excluded parties are supposed to be listed on a web-based database called the Excluded Parties List System (EPLS). This system is designed to ensure that parties on the excluded list, otherwise referred to as "disbarred" or "suspended," are ineligible to receive contract awards from the federal government.

In February 2009 the Government Accountability Office (GAO) issued a report (GAO-09-174) that detailed cases in which "businesses and individuals that have been excluded for egregious offenses ranging from national security violations to tax fraud are improperly receiving federal contracts and other funds." The cases demonstrate significant flaws in procedures designed to preclude the awarding of federal contracts to disbarred or suspended contractors. Specifically, the report found that "ineffective management of the EPLS database" and defective practices at some federal agencies contributed to disbarred entities receiving federal contracts.

GAO recommended that the Administrator of General Services take the following five actions:

1. issue guidance to procurement officials on the requirement to check EPLS prior to awarding contracts and to suspension and debarment officials on the 5-day entry and contractor identification number requirements;

2. ensure that the EPLS database requires contractor identification numbers for all actions entered into the system;

3. strengthen EPLS search capabilities to include common search operators, such as AND, NOT, and OR;

4. take steps to ensure that the EPLS points of contact list is updated; and

5. place a warning on the Federal Supply Schedule Web site indicating that prospective purchasers need to check EPLS to determine whether vendors are excluded and explore the feasibility of removing or identifying excluded entities that are listed on the GSA Schedule.

(Source: GAO-09-174 EPLS Investigation, p. 21)

Although GAO acknowledges in the report that GSA has taken some action to address these recommendations, GAO stated that it did not consider the actions taken to be sufficient to fully address the identified problems. Given the public interest in this issue, I respectfully request an update on GSA's efforts to ensure that federal contracts are not being improperly awarded to disbarred entities. In addition, I welcome any recommendations that GSA might have regarding the establishment of additional safeguards.

Businesses and individuals who have violated the public trust forfeit the right to do business with the federal government. Simply stated, those who engage in illegal activities should be barred from doing business with the federal government. If the list on which disbarred entities are supposed to appear is defective, it needs to be fixed. Pennsylvanians need to have confidence that disbarred businesses or individuals are not improperly receiving federal contracts. The troubling cases set forth in this report demonstrate that more work needs to be done to prohibit inappropriate awards to disbarred contractors. I expect all federal agencies to take this responsibility very seriously.

Please feel free to contact me directly or have your staff contact my office.

Sincerely,

Robert P. Casey, Jr.
United States Senator

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