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Agencies lack information on underpaid contract workers

Companies that provide contracted security, janitorial and other workers to federal agencies may be underpaying their employees, but agencies lack sufficient information to know which contractors have broken the law, according to a Government Accountability Office report released publicly Nov. 23.

The Service Contract Act requires that companies providing service workers to do jobs in government agencies must pay those employees at least the prevailing rate in wages and benefits that other such private sector workers receive in that location.

The Department of Labor is tasked with enforcing this law and investigating contractors that have reportedly paid their employees less than the prevailing rate.

In the past five years, over 5,000 compliance investigations have led to over $220 million in back wages paid to federal contract service workers, according to the GAO report.

Some contractors are also debarred as a result of DOL investigations, meaning that they cannot be awarded federal contracts for three years.

But according to the report, agencies do not always receive necessary information from DOL on debarments to let them know that they should not contract with a particular provider.

“When recording SCA debarments, DOL does not always include the unique identifier for an employer so that contracting agencies can accurately identify debarred firms,” the report said.

“DOL also does not have a process that consistently or reliably informs contracting agencies about SCA violations by employers. Without improved information sharing by DOL, an agency may award a contract to an employer without being aware of or considering its past SCA violations.”

In the five years that GAO reviewed, the federal government obligated over $720 billion on contracts that provide service workers for government agencies.

The Department of Labor also told GAO officials that poor communication between itself and other agencies, most notably the U.S. Postal Service, has delayed enforcement of contract service worker requirements, though “USPS officials told GAO they were unaware of any communication gaps.”

One specific case reviewed by GAO found that USPS officials failed to respond to emails and voicemails from DOL for several months, and DOL officials noted that these delays can ultimately extend how long it takes to take corrective action against contractors who aren’t meeting requirements.

“Officials also noted that high rates of turnover among contracting officers can make it difficult and time consuming to identify points of contact at contracting agencies,” the report said.

GAO recommended that DOL analyze its use of enforcement tools and improve information sharing on contractor debarments, while DOL and USPS institute written protocols for communication about Service Contract Act violations. Both agencies agreed with the recommended actions.

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