Monday, October 4, 2010

If you break the law, should you get a government contract?

At the very least, the government shouldn't reward serial labor law violators with big fat federal contracts, argues our brother blogger TeamsterPower over at dailykos.

But it does. And the government gives contracts to so many bad actors that one-fifth of federal contracted workers did not earn enough to raise a family of four above the poverty line, according to the Economic Policy Institute.

TeamsterPower writes that the federal government should award more contracts to companies that provide good jobs here -- and give fewer contracts to those that cheat their workers and send jobs overseas. By improving its procurement practices, the government could improve the lives of hundreds of thousands of workers in their daily lives.

TeamsterPower writes:
Like it or not, the U.S. government spends about $500 billion a year on goods and services from private businesses. Only in countries like Somalia does the government not have a major role in the national economy.

As economist
Bob Kuttner points out, federal procurement directly or indirectly influences one job in four in the economy.

Kuttner, in the
October issue of the American Prospect, notes that the federal government gives business to companies that systemically violate labor law and decent standards. The federal government sometimes awards lucrative contracts to companies that batter down wages.

We got an idea of how bad the problem is on Friday, when the Government Accountability Office released a report that said 20 federal contractors received half of the 50 biggest fines levied by the Labor Department’s Wage and Hour Division between the 2005 and 2009 budget years.

Those companies received more than $9 billion in federal contracts in the 2009 budget year. Not one was suspended or disbarred.

The government actually awarded $500 million in contracts last year to Tyson Foods, which had more than 100 OSHA health and safety violations and 13 Wage and Hour violations. The company fired multiple employees for taking lawful family medical leave and cheated 3,000 workers of $250,000. Not outraged yet? Consider this:

OSHA cited the company for one serious violation and a $7,000 fine when (an) employee who fell into a wastewater pit containing poultry debris was fatally asphyxiated when the debris lodged into his throat in 2004.

Here are some other companies that get big, fat government contracts even though they mistreat their employees:
  • FedEx a notorious union-buster that routinely misclassifies employees, received $1.5 billion in Defense Department contracts last year.
  • U.S. Foodservice, another union buster, received $2 billion in military contracts over the past decade.