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GAO: Top labor law violators receive millions in federal contracts

Oct. 5, 2010 - 06:00AM   |  
By NICOLE BLAKE JOHNSON   |   Comments
Government Accountability Office auditors reviewed the 50 largest back-wage liabilities assessed on companies by the Labor Department between 2005 and 2009.
Government Accountability Office auditors reviewed the 50 largest back-wage liabilities assessed on companies by the Labor Department between 2005 and 2009. (Sheila Vemmer / Staff)

Contractors that reap billions of dollars in federal contracts also are among the top violators of federal wage, labor, and workplace safety laws, a new investigation finds.

Government Accountability Office auditors reviewed the 50 largest back-wage liabilities assessed on companies by the Labor Department between 2005 and 2009 and found that 60 percent of those assessments were made against companies that received federal contracts in 2009. Twenty-five of those 50 assessments went to 20 federal contractors for more than $80 million in back wages and none of those companies was suspended or debarred from receiving federal contracts.

GAO also examined the 50 largest fines assessed by Labor against companies for workplace safety and health violations. It found that 40 percent of those went to companies that received federal contracts in 2009. GAO said it did not know to what extent, if any, federal contracting officers consider a company's workplace safety and health violations when deciding whether to award a contract.

GAO said the scale of wage and workplace safety violations among contractors could be even greater because Labor Department databases it reviewed are incomplete.

"The full extent of the federal government's contracts awarded to companies cited for labor violations is not known," GAO said.

GAO also reviewed 15 contractors more closely that had violated a variety of labor laws, including wage, workplace safety and collective bargaining laws. Those 15 companies received more than $6 billion in federal contracts in 2009.

GAO said the companies none of which was named in the report also violated other laws, including hiring undocumented workers, breaching environmental standards, and fraudulently billing Medicare and Medicaid.

One food services company with about $500 million in contracts with the Defense, Agriculture and Justice departments has been cited for more than 100 health and safety violations by Labor's Occupational Safety and Health Administration. Citations included a fine for the death of a worker who fell into a pit of poultry debris. A court also found the company failed to properly compensate 3,000 employees.

The report, released Oct. 1 and titled "Federal Contracting: Assessments and Citations of Federal Labor Law Violations by Selected Federal Contractors," was requested by Rep. Robert Andrews, D-N.J., chairman of the House Education and Labor subcommittee on health, employment, labor and pensions.

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