Report/Database Methodology

This report represents all actions that POGO was able to identify through research and document through primary sources. POGO does not claim to have cited all misconduct and alleged misconduct of the government's top contractors.

This compilation is, by necessity, incomplete, as there is no official central repository of information about violations committed by contractors. Therefore, for this investigation a myriad of public records were searched for primary source data.

This database is not a legal document. Although some legal terminology is used, this database is only a compilation of misconduct and alleged misconduct committed by government contractors. Sources used to compile this information came primarily from government documents, and in each case the source(s) is cited.

This is a compilation of misconduct and alleged misconduct occurring between 1990 and 2002; alleged misconduct is cited prior to 1990 if the case is still pending. POGO cited the number of violations, not incidents. If a single incident led to several violations, multiple violations were cited. The report's scope includes the government's top 20 contractors, for fiscal year 19991, based on total contract dollars they received, and the top five contractors of each of the government's top 10 agencies, based on total contract dollars awarded by each agency. Because many of these contractors appeared on this list more than once, this added up to a total of 43 contractors. The total contract dollars that are awarded to a company include divisions, subsidiaries, and joint ventures2. These 43 contractors accounted for 45% of all contract dollars awarded for fiscal year 1999 for contracts valued at $25,000 or more.

POGO contacted every company that was examined in this report to verify our data and allow them to submit comments to be included in the report. POGO received nine responses; eight sent written responses that can be viewed in Appendix B. POGO made appropriate corrections in our data where needed as the result of these responses.

Sources

 The following sources were utilized to obtain information for this report:


The following explanations correspond to columns in the database with the same title.
Contractor and Division/Subsidiary

 The report's scope includes the government's top 20 contractors, based on total contract dollars they received, and the top five contractors of each of the government's top 10 agencies, based on total contract dollars awarded by each agency. Because many of these contractors appeared on this list more than once, this added up to a total of 43 contractors (parent companies). The total contract dollars that are awarded to a company include contracts awarded to specific divisions and subsidiaries of that company. POGO determined which contractors to include from Government Executive Magazine's August 1, 2000, edition of the annual Top 200 Federal Contractors Issue, which is based on data from the Federal Procurement Data System (FPDS).

Included in this column is the division or subsidiary of the parent company that was involved in the cited case, if applicable. Company names in parentheses represent a subsidiary of a subsidiary. Also listed in this column are names of companies before a merger occurred (e.g., Martin Marietta, McDonnell Douglas, Allied Signal, Lockheed, Northrop) if that pre-merger company was involved in the cited case. Subsidiaries are cited regardless of whether the violations or alleged violations occurred before the subsidiary was acquired by the parent company. Only subsidiaries of which the parent company owns a controlling share (over 50%) are listed. If a parent company has sold a subsidiary, POGO does not lists that subsidiary's violations or alleged violations that occurred after the date of sale.

 Case Type

 In order to make the database reader friendly and to allow the reader to manipulate the data more easily, the case types were condensed into seven different categories. A category can pertain to either a criminal, civil, or administrative proceeding. Listed below are descriptions of the categories.

Antitrust - Applies to price-fixing and bid-rigging cases. These cases fall under the Sherman Act, which is enforced by the Department of Justice's Antitrust Division.

Consumer - Pertains to cases where a company was alleged to have been deceitful, unethical, fraudulent, etc. in its dealings with consumers. Wrongful Death suits involving civilians are also included in this category. These cases generally deal with products or services that are directly marketed to the general public or public institutions.

Defense - This category involves military contracts and covers such violations and alleged violations as fraud, cost and labor mischarges, testing falsifications, kickbacks, and bribery. Some of the laws this category covers are the False Claims Act, Truth in Negotiations Act (TINA), Arms Export and Control Act, Foreign Corrupt Practices Act, Racketeer Influence and Corrupt Organizations (RICO), International Traffic in Arms Regulations, and Wrongful Death suits involving military personnel.

Environment - This category applies to issues relating to environmental pollution. Laws and regulations that relate to this category are the Clean Water Act; Clean Air Act; Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund Law; Toxic Substances Control Act (TSCA); and the Resource, Conservation, and Recovery Act (RCRA).

Financial - Primarily refers to shareholder cases that are enforced by the Securities and Exchange Commission (SEC).

Labor - Pertains to any case that involves an employee's safety, health, or rights. Examples of this category are race discrimination, sex discrimination, age discrimination, and workplace injuries. POGO does not cite Occupational, Safety, and Health Act (OSHA) violations or National Labor Relations Board (NLRB) decisions in this category or in any other part of the database because historically these types of violations have not been grounds for a suspension or debarment action.

Other - This category includes any case that does not easily fit into the other categories. This category contains violations of laws such as Intellectual Property, which are laws pertaining to patents, trademarks, copyrights, unfair competition, trade secrets, and technology transfers. It also includes violations and alleged violations such as fraud, cost and labor mischarges, etc., that do not involve defense contracts.

 Disposition

Definition: The final arrangement or decision. Conclusion, settlement, determination, solution, resolution, outcome.

Fine - A sum of money imposed upon a defendant as a penalty for an admission of wrongdoing.

Found Guilty - Pertains to a criminal case where either a judge or a jury found the defendant guilty.

Judgment Against Defendant - A civil case where the defendant was either found guilty or entered into a plea of guilty.

Pled Guilty - Refers to a criminal case where the defendant entered a plea of guilty.

Pending - Applies to a case that has not yet been resolved.

Restitution - Making good or giving an equivalent value for any loss, damage, or injury. Reimbursement, compensation, retrieval, refund.

Settlement - Agreement between the prosecution or the plaintiff and the defense. In some settlement agreements, the contractor will admit to no guilt or wrongdoing. Consent Decrees are also included in settlement case dispositions.

Superfund Clean-up Costs - Payment to cover the cost of the clean-up by companies who were found to be, or alleged to be, potentially responsible parties under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA), also known as the Superfund Act.

Date

In pending cases the date reflects the filing date of the case. In all other cases, the date refers to the date the case was closed. Many dates are approximate because not all sources cite the same date and sometimes the source will have incomplete information. A closed case may still be pending appeal.

 Fines/Penalties, Restitution, and Settlements

Exempt Penalties - Under the Atomic Energy Act of 1954, nonprofit contractors, such as the University of California, are exempted from paying the civil penalties that the Department of Energy assesses under the act.

Fine/Penalty - Fines or money damages imposed by a regulatory agency. This can pertain to both civil and criminal cases.

Restitution - Making good or giving an equivalent value for any loss, damage, or injury. Reimbursement, compensation, retrieval, refund.

Settlement - A payment, adjustment, or compromise agreed upon by both plaintiffs and defendants.

"Part Of" - Indicates that there is more than one company involved in an alleged wrongdoing and therefore the company cited is not liable for the total fine/penalty, restitution, and/or settlement. Any monetary amount that has the words "Part Of" before it, is not included in the report's monetary statistics.

Sealed Case - The terms and the conditions of these cases are confidential and unknown to the public.

Other terms that are used in these columns are contract case, refunds, license restrictions, and liable for life insurance policy. These cases either did not allow for any monetary penalties or the disposition called for an action where monetary penalties were not quantified.

 Case Description

Case descriptions are directly quoted from the cited sources for that case. However, some cases are briefly described by the type of lawsuit, e.g., Age Discrimination (Sex), as cited by the court docket. Moreover, another brief description that is continuously used is "Procurement Fraud" as cited by the General Accounting Office.

 Case Source

This column lists the source(s) used to compile information regarding the specific case. To determine the facts of the cases, only primary sources were used, such as government documents (federal and state), court dockets, court opinions, law firm press releases, confirmations from private attorneys and government officials (federal and state), etc. Some case descriptions were obtained using newspaper or magazine articles because a brief description of the case was unobtainable through the primary source.

 Court Case

All the court cases that were identified are listed in this column. Some court cases are listed more than once because they involve more than one company. Some court cases are also listed more than once when they pertain to both criminal and civil fines or settlements. Blank columns do not imply that the case did not go to court. All court cases are abbreviated, for example US DC CD CA should read - United States District Court for the Central District of California. States have between one and four district courts.

Also listed in this column is the type of court each case was resolved in. This information appears in parenthesis in the Court Case column. The following are the three court types that are found in the database:

Administrative - Any charge that a federal or state agency brought against a contractor, that was not litigated in court.

Civil - Pertains to the court which hears disputes arising under the common law and civil statutes.

Criminal - Pertains to the court which hears prosecutions under criminal laws.



1. Consequently, names of companies appear as they did in fiscal year 1999. This pertains specifically to Bindley Western, which was acquired by Cardinal Health; Cordant Technologies, which was acquired by Alcoa; Morrison Knudsen, which changed its name to the Washington Group; and Litton Industries, which was acquired by Northrop Grumman.

2. POGO determined which contractors to include from Government Executive Magazine's annual Top 200 Federal Contractors Issue, which is based on data from the Federal Procurement Data System (FPDS).