Clinton introduces bill to post contractor violations on the Web

Sen. Hillary Clinton, D-N.Y., has introduced a bill that would force contractors to self-report criminal actions or government overpayments to agency inspectors general under the threat of potential disbarment or suspension. The misconduct would then be made publicly available on a searchable Web site.

The measure is identical to language that was cut from a bill that passed the House in April that would close a regulatory loophole exempting contractor employees working overseas from stricter self-reporting requirements.

Clinton, a candidate for the Democratic nomination for president, introduced the Guaranteeing Real Accountability in Federal Transactions Act (S. 2916) on April 25. Thus far, the bill has no co-sponsors.

"The American people deserve an efficient, transparent and accountable government that works for them," Clinton said in a statement. "Instead, the Bush administration has outsourced critical government functions to unaccountable and too often unqualified private contractors. It is critical that the federal government crack down on contractors that hide criminal fraud and abuse."

Clinton's bill would build on the Close the Contractor Fraud Loophole Act (H.R. 5712), which passed the House by a voice vote on April 23. Sen. Claire McCaskill, D-Mo., introduced an identical companion bill in the Senate, which she expects to include in the National Defense Authorization Act.

Sponsored by Rep. Peter Welch, D-Vt., the House bill closes the overseas loophole in proposed changes to the Federal Acquisition Regulation, which would require contractors to self-report certain procurement violations. The administration has said the exemption was a "drafting error" and that it is fixing it through a standard regulatory process.

"This loophole is so outrageous that once exposed in the light of day it was simply indefensible," Welch said after the bill was passed. "No contractor should be given a green light to defraud taxpayers. We need to protect taxpayer dollars and our troops serving overseas by closing this loophole with the force of law."

Welch's original bill also included the tougher transparency measures found in Clinton's bill. Democrats agreed to remove the language, however, after negotiations with Republicans, particularly Rep. Tom Davis, R-Va., ranking member of the House Oversight and Government Reform Committee.

Davis was troubled that the original bill put into statute proposed FAR changes that had not yet been fully vetted.

"He would have the same concerns about Sen. Clinton's bill should it pass the Senate without similar changes being made," said Ali Ahmad, a Davis spokesman. "If passed, it would supplant the normal rule-making process, sacrificing flexibility and adaptability for short-term political gain."

Clinton's legislation makes no mention of the FAR rule change and would implement the core regulatory proposals through legislation.

The senator's bill requires companies competing for federal contracts larger than $1 million to disclose any violation of federal criminal law while performing or bidding for a federal contract. Companies also would have to notify inspectors general at agencies where they are submitting bids if they have ever received a significant overpayment from the federal government.

All such violations would to be posted on the Internet and would be included in the Office of Management and Budget's annual report to Congress.

The legislation also protects contractor employees who blow the whistle on company fraud or overpayments from potential retribution by their employer.