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Company Behind Fireworks Disaster Still a Fed Contractor

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In April 2011, an explosion and fire at a Waipahu, Hawaii, storage bunker killed five men who were disposing of illegal fireworks seized by federal authorities. The men were performing the work for a Treasury Department subcontractor named Donaldson Enterprises, Inc. (DEI).

Yesterday, at a public meeting, the U.S. Chemical Safety and Hazard Investigation Board (CSB) released a final report and recommendations regarding this tragic accident. The CSB concluded that the incident was the result of DEI’s unsafe practices, as well as a lack of national fireworks disposal guidelines and a lack of government-wide safety and environmental responsibility requirements for federal contractors. POGO attended the public meeting and presented a comment about the contractor responsibility implications of the tragedy.

We agree with the CSB’s recommendation to the Federal Acquisition Regulatory (FAR) Council to establish an additional contractor responsibility requirement focusing on contractor safety performance. We support this change because, as the Government Accountability Office found in 2010, and as we know from our Federal Contractor Misconduct Database, federal contractors receiving billions of taxpayer dollars often have abysmal workplace health and safety records. Safety compliance programs and violation histories should be among the first things a contracting officer checks when assessing a prospective contractor’s responsibility.

Although the CSB did not recommend it, POGO also thinks the FAR Council should expand the scope of information contractors are required to report in the Federal Awardee Performance and Integrity Information System (FAPIIS) database to include environmental and workplace safety violations not occurring during the performance of a federal contract or grant. We are somewhat concerned, however, that neither a state workplace safety citation nor federal criminal charges brought against the company as a result of the disaster show up in DEI’s public FAPIIS record, even though DEI was performing the fireworks disposal as a federal subcontractor.

Finally, it came to POGO’s attention during yesterday’s public meeting that DEI, despite the aforementioned citation and criminal charges, is still eligible to receive federal contracts and subcontracts. DEI does not show up in the federal government’s list of suspended and debarred contractors. In fact, federal contracting data shows that DEI has won more than $920,000 in contracts since the Waipahu tragedy.

Image: Aftermath of the explosion and fire at the Waikele storage bunker in Waipahu, Hawaii, April 8, 2011. From U.S. Chemical Safety and Hazard Investigation Board Investigation Report 2011-06-I-HI, January 17, 2013.

By: Neil Gordon
Investigator, POGO

Neil Gordon, Investigator Neil Gordon is an investigator for the Project On Government Oversight. Neil investigates and maintains POGO's Federal Contractor Misconduct Database.

Topics: Contract Oversight

Related Content: Contractor Accountability

Authors: Neil Gordon

Submitted by Ms. Gorgon. at: January 23, 2013
Message received, Mr. G, but don't you see a real connection in some cases? Take vaunted Boeing building the electronic "fence" along our SW border a few years ago. The unwinding of that programmatic and contracting disaster, courtesy of DHS, shows how the government's incompetence and negligence is mutually reinforced by the contractor's incompetence and negligence. If you ask, well, which one came first--it was the govt's--and its contributions to contractor failure kept on coming. The capstone of such public-private failures is that both linked arms to obscure the disaster and skirt accountability--and the executives and organizations on both sides did make their escape. Voila.
Submitted by anshul at: January 23, 2013
Perhaps, Mr. Gordon, you could spare a word or two regarding the quite possible incompetence and/or negligence of the federal employees who conceived and oversaw contractor performance. And please name the prime contractor
Submitted by Neil Gordon at: January 22, 2013
Ms. Gorgonzola: Blame the government for the contractor's (or subcontractor's) poor performance? Kinda like when a student fails, it's really the teacher who failed, right? I agree that incompetence and/or negligence must be punished no matter who commits it, but in this instance, it seems pretty clear that the blame belonged to the contractor (VSE Corp.) and the sub (DEI), not the Treasury employee(s) overseeing them.
Submitted by at: January 19, 2013
Neil, I am co-counsel for the estate and family of Justin Keli'i. On their behalves, thank you for questioning the CSB at last week's webinar regarding Government contracting. If you are interested in developments in the pending civil lawsuit against VSE now in the U.S.Federal District Court in Hawaii, you can contact me anytime at 808 523 9477. I would welcome the opportunity to speak with you. Regards, Jan Weinberg
Submitted by Ms. Gorgonzola at: January 18, 2013
Perhaps, Mr. Gordon, you could spare a word or two regarding the quite possible incompetence and/or negligence of the federal employees who conceived and oversaw contractor performance. And please name the prime contractor. There is no such thing as "a federal subcontractor." Federal contractors may have subcontractors. Not every single responsibility flows down to the subs, as you probably are aware. But getting back to your punishment interest, would you be agreeable to firing or barring from further work any federal employee bearing culpability for conceiving and overseeing the sometimes bad performance of contractors? Don't you think that would inspire better federal performance, not just contractor performance/

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