About POGO's Federal Contractor Misconduct Database (FCMD)

The government awards contracts to companies with histories of misconduct such as contract fraud and environmental, ethics, and labor violations.  In the absence of a centralized federal database listing instances of misconduct, the Project On Government Oversight (POGO) is providing such data.  We believe that it will lead to improved contracting decisions and public access to information about how the government spends hundreds of billions of taxpayer money each year on goods and services. Report an instance of misconduct »

*** Click -- HERE -- to watch the FCMD tutorial videos ***

Overview

Contractor misconduct is a term used by the Project On Government Oversight (POGO) to highlight instances when companies that sell goods or services to the government violate laws or regulations or are the subject of misconduct allegations in their dealings with the government, individuals, or private entities. POGO has compiled this Federal Contractor Misconduct Database (FCMD) because current government databases do not provided the information necessary to make a genuine determination of whether a contractor is responsible or risky. Although, the General Services Administration (GSA) has the Excluded Parties List System (EPLS), it only provides information about suspended or debarred individuals and contractors. Furthermore, very few large contractors have been suspended or debarred over the years. The GSA's federal contractor and grantee responsibility database created under the Fiscal Year 2009 National Defense Authorization Act (Public Law 110-417), the Federal Awardee Performance and Integrity Information System (FAPIIS), includes a far narrower range of misconduct than the FCMD.

With federal contract dollars growing rapidly since 2000, POGO hopes that the FCMD will be used by government officials to make well-informed contracting decisions. Additionally, POGO hopes that the FCMD will be used by Congress, the media, the public, and other contractors when reviewing a contractor's history of responsibility, an essential prerequisite to receive contracts and taxpayer dollars. 

FCMD Details

POGO's new and improved version of the FCMD is a compilation of misconduct and alleged misconduct committed by the top federal government contractors between January 1, 1995, and the present. POGO compiled this database through searches of public records. Acts occurring earlier are included only when they were resolved after January 1, 1995, or are still pending.

The tools displayed on the left side of the screen allow the user to search for key words, or to sort instances by contractor, disposition, court type, misconduct type, enforcement agency, contracting party, dollar amount and/or date. Searches and sorts will bring up both resolved and pending instances of misconduct. Pending instances, however, are not counted in instance totals.

We do not claim to have identified every instance of misconduct and alleged misconduct involving these contractors. POGO's total number of misconduct instances and penalty totals might be low because we could not find undisclosed settlements and, in numerous cases, we were unable to determine (when multiple parties were involved in the same misconduct instance) financial settlement terms. Indefinite instances are generally included with a zero ($0) monetary penalty, fine, etc.

We have attempted, however, to find and categorize specific instances of misconduct that should help government officials. One of the major upgrades to the FCMD is the uploaded primary source documentation about each instance. POGO has tirelessly scanned the Internet and utilized the Freedom of Information Act (FOIA) to find government and contractor press releases, settlement agreements, court documents, and other government reports to get these primary sources. Although legal terminology is sometimes used in describing misconduct, the FCMD is not a legal document.

While we realize that certain types of misconduct could be listed under multiple categories, we did our best to catalog them. If a single incident resulted in several distinct violations - such as when one act of wrongdoing results in the filing of separate criminal, civil, or administrative cases (for example, the ethics violation involving Darleen Druyun, Michael Sears, and Boeing) - POGO treated these violations as separate instances to prevent bundling of names, case types, and financial terms. This system is not intended to artificially inflate the total number of instances.  Rather, it is intended to be more user-friendly to allow better sorting and searching.  POGO has made every attempt to cross-reference multiple instances of misconduct that derive from the same matter. Misconduct of subsidiaries and acquired companies or their employees is included with the parent company if the parent played any role in the act itself or its resolution, including any payment made to the government or a private entity.

In an effort to provide an accurate database, and to allow contractors to respond for the record, POGO contacted every contractor featured in the FCMD for confirmation on the misconduct instances. POGO's correspondence and the contractor's reply (if received) are included on each contractor's page (in the right-hand column).

The majority of the misconduct instances involve civil, criminal, or administrative settlements. This should not come as a surprise, as corporations frequently resolve cases prior to a trial or widespread media exposure.  Rather than risk going to trial, they often choose to settle the matter as a cost of doing business, often without having to admit culpability or wrongdoing. Many times, settlements provide companies with more control over the terms of the agreement and the public disclosure of the alleged wrongdoing. Nevertheless, inclusion of such agreements and settlements is essential for the government to learn more about a contractor's complete record of responsibility.

In addition to the misconduct instances for each contractor, the FCMD includes links to helpful NGO and government resources, and contractor-specific links to annual reports, company SEC filings, lobbying and campaign finance information, and other helpful information.

The FCMD uses the ranking compiled by USAspending.gov. The most recent USAspending.gov ranking is based on data posted in March 2011 and covers fiscal year 2010.

POGO will update the FCMD when the complete ranking and contract award dollar totals for the succeeding fiscal year become available. As we periodically update the database in keeping with the USAspending.gov ranking, POGO will keep all old rankings in our Archives section. Contractors not appearing on the most recent ranking will still appear in searches and sorts and in the Contractor pulldown menu.

Sources

The following sources were consulted and have been provided where applicable:

·        Federal agency press releases and reports (including reports and releases from Inspectors General, U.S. Attorneys, Department of Justice (DOJ), Securities and Exchange Commission (SEC), and the Government Accountability Office (GAO))

·        State agency press releases and reports

·        Federal and state court documents and pleadings

·        Company press releases

·        Law firm press releases

·        Freedom Of Information Act (FOIA) requests

·        Media reports

Misconduct Type

In order to make the database user-friendly and allow the reader to analyze the data more easily, misconduct types are condensed into 18 different categories. A category can pertain to a criminal, civil, or administrative proceeding. Listed below are descriptions of the categories:

1.     Anti-trust: Price-fixing and bid-rigging

2.     Consumer Affairs: Defective products; unfair or deceptive business practices (NOTE: Instances involving pharmaceutical products or medical devices are generally included under "Health")

3.     Cost/Labor Mischarge: Goods or labor billed at unfair or unreasonable costs or prices

4.     Defective Pricing: While technically not misconduct, POGO considers cases involving cost accounting or pricing later found to be incorrect as being indicative of a lack of contractor responsibility and accountability

5.     Environment: Pollution and hazardous waste violations pertaining to the ecosystem (i.e., violations of the Clean Water Act, Clean Air Act, etc.)

6.     Ethics: Conflict of interest and ethics instances (i.e., bribery, kickbacks, Procurement Integrity Act violations, etc.)

7.     Government Contract Fraud: False statements or false claims submitted to the government in the course of a contract (i.e., False Claims Act, product substitution, false testing, defective parts, etc.)

8.     Government Grant Fraud: False statements or false claims submitted to the government in the course of obtaining or administering a grant

9.     Health: Acts that threaten the health of the general public

10.     Human Rights: Denial of basic human freedoms (i.e., torture, trafficking in persons, etc., but not including worker discrimination cases which are included under "Labor") 

11.     Import/Export: Trade violations (i.e., Arms Export Control Act, etc.)

12. Intellectual Property: Copyright, patent, and trademark violations

13. Labor: Violations involving employees' safety, health, and personal rights (i.e., discrimination, etc.)

14. Non-Governmental Contract Fraud: False statements or fraudulent billing involving a contract to which the government is not a party (i.e. product substitution, false testing, defective parts, etc.)

15. Poor Contract Performance: Failing to fully satisfy contractual obligations; contractual matters that appear questionable but do not rise to the level of fraud

16. Securities: Shareholder cases that are primarily enforced by the Securities and Exchange Commission (SEC) or state agencies

17. Tax: Violations enforced by the Internal Revenue Service (IRS) or state agencies

18. Other: Violations not covered by another category

Disposition

Cases in the FCMD are either pending or have been resolved in one or more of the following ways:

·       Administrative Agreement:   An agreement between a contractor and an agency that usually involves a change in business practices rather than a monetary penalty.

·       Deferred Prosecution Agreement:   An agreement between a contractor and prosecutor that imposes a period of probation on the contractor, during which time charges are held in abeyance in exchange for the contractor's agreement to cooperate with investigators, enact corporate reforms, and/or cooperate with a specially-appointed corporate monitor. If the contractor satisfies the terms of the agreement, the charges are dismissed.

·       Fine:  A sum of money the contractor is required to pay as a penalty for alleged wrongdoing. In some cases, the fine was split among two or more contractors or it was undisclosed. As a result, POGO was unable to determine the exact amount each contractor paid.

·       Found Guilty:  Either a judge or a jury found the contractor guilty in a criminal case.

·       Investigative Finding: Government reports that detail misconduct and other missteps that might lead to a criminal, civil, or administrative disposition.

·       Judgment Against Defendant:  The contractor was either found guilty or pleaded guilty in a civil case.

·       Non-Prosecution Agreement:   An agreement between a contractor and prosecutor in which no charges are filed in exchange for the contractor's payment of a criminal fine, agreement to cooperate with investigators and/or agreement to enact corporate reforms.

·       Pending:  The case has not reached a conclusion; as such, it is not counted as an instance of misconduct. Pending instances are listed in the right-hand column of each contractor's page.

·       Pleaded Guilty:  The contractor entered a plea of guilty in a criminal case.

·       Restitution: The contractor reimbursed the government or victim for financial losses or other damages.

·       Settlement:  The parties agreed to end any legal proceedings in exchange for money or contractor action, often with no admission of guilt or liability. In some cases, POGO was unable to determine the settlement amount because the parties agreed to keep this information confidential.

·       Suspension/Debarment - Contractor: A tool used by procurement officials to prevent nonresponsible contractors, divisions and/or affiliates from receiving future contract awards. The contractor cannot receive future contract awards until the suspension or debarment is waived or lifted.

·       Suspension/Debarment - Employee: A tool used by procurement officials to prevent nonresponsible employees or former employees of a contractor from receiving future contract awards. An employee or a former employee of a contractor cannot receive future contract awards until the suspension or debarment is waived or lifted.

Enforcement Agency

Misconduct instances are classified according to the government agency that investigated or prosecuted the underlying case. The agency can be "State/Local," federal (i.e. "Agriculture," "Defense - General," "Defense - Air Force," "Defense - Army," "Defense - Navy," "EPA," "Treasury - IRS" etc.), "International," or "Multiple Agencies." Instances not involving a government agency, such as legal actions pursued by companies or individuals, are classified as "Non-Governmental."

Contracting Party

Misconduct instances involving a contractual relationship are classified according to who the other contracting party is. The contracting party will either be a government agency (see "Enforcement Agency" section above) or "Non-Governmental." Instances not involving a contracting party are classified as "None." In some instances, the contracting party and the enforcement agency may be the same.

Synopsis

POGO provides a fair and neutral description of the misconduct instance and its outcome.  Whenever possible, the synopsis quotes the primary source directly. The synopsis attempts to answer the following questions for each instance of misconduct:

·        Who were the parties involved?

·        What was the fine/penalty?

·        What was the statute/name of law allegedly violated?

·        How did the contractor allegedly violate the statute (i.e., what was the misconduct)?

·        When did the alleged misconduct occur?

·        Where did the alleged misconduct occur?

POGO's FCMD Now vs. 2002

This marks the second version of the FCMD. In 2002, POGO produced a database that examined 43 contractors that did business with various federal agencies.

POGO's new and improved FCMD has several key new features: a redesigned, user-friendly interface with new search and sort features, new instances of misconduct, pending cases, contractor responses (if submitted), the omission of Superfund cases (POGO concluded that cleanup costs should not be considered misconduct), and an expanded list of contractors that receive the majority of all federal contract award dollars.

Many contractors in the FCMD are holdovers from 2002. For example, Lockheed Martin, Boeing, Northrop Grumman, General Dynamics, and Raytheon remain at or near the top of the ranking in terms of contract dollar amounts and misconduct instances. Others, such as TRW and Litton, have since been acquired by or merged into other contractors. A few others, such as United Space Alliance and UT-Battelle, are joint ventures between two or more contractors, some of which appear elsewhere in the database.

Contractor misconduct that is not included in POGO's FCMD can be reported to contractormisconduct@pogo.org or to:

POGO

Attn: Scott Amey

1100 G Street, NW

Suite 900

Washington, DC 20005-3806

phone (202) 347-1122

fax (202) 347-1116

Please, do not contact POGO via a government phone, fax, or computer.