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On Thursday, the U.S. Senate and House released a new Government Accountability Office report criticizing a half dozen federal agencies, including the Department of Justice, for lacking aggressive policies to weed out bad contractors and wasteful spending. The report by the GAO is entitled “Suspension and Debarment: Some Agency Programs Need Greater Attention, and Governmentwide Oversight Could be Improved” [PDF]. The programs examined in the report cover every company that sells goods or services to the government or holds other federal contracts, such as the big pharmaceutical and healthcare companies paid by Medicare. GAO found that some government agencies, like the Environmental Protection Agency, have very active suspension and debarment programs to exclude bad contractors. But the study also found that at least six agencies, including DOJ, did not have strong programs. The report recommends that Attorney General Eric Holder—along with the secretaries of the Commerce, Health and Human Services, State, and Treasury Departments, and the head of the Federal Emergency Management Agency—”take steps to improve” debarment programs. It suggests they assign dedicated staffing, develop detailed guidance, and use a case referral process. FEMA, State, and Treasury concurred with the report’s recommendations, the GAO said, while Commerce, HHS, and Justice generally concurred, but with some exceptions. In comments written by Lee Lofthus, Justice’s assistant attorney general for administration, the DOJ agreed “that senior agency officials [should] actively promote and encourage the suspension and debarment case referral process.” But Lofthus said the department “does not believe that assigning dedicated full-time staff to its suspension and debarment program is necessary,” because Justice already works to conduct business with responsible parties. Besides, he said, given current budget restraints, it is impractical to hire new staff at this time. But GAO is not convinced: “Our findings show that agencies that do not devote sufficient attention to this area likely will continue to have few suspensions and debarments, which may place the government at risk of doing business with irresponsible contractors.” The report was discussed at Thursday’s House Oversight and Government Reform Subcommittee on Technology and Procurement Reform hearing. ( More on that hearing is available here.) Responding to the report, Senate Homeland Security and Governmental Affairs Committee chairman Joseph Lieberman said in a press release that the government spends over $530 billion a year on federal contracts. “Federal agencies should be far more aggressive in weeding out contractors who, because of their misconduct, are untrustworthy business partners,” said Lieberman, an independent from Connecticut. He also said that eliminating the “bad actors” would wring waste from government spending and help restore taxpayers’ trust. Senator Susan Collins, a Maine Republican and ranking member of the Senate committee, added, “Suspension and debarment are important tools to help ensure that only honest and responsible individuals and businesses win federal contracts and grants. That is why the findings in this GAO report are so disturbing.”

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