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Homeland Security Falling Short in Managing Risky Contractors

Contracted workers install a blue tarp on a roof damaged by Hurricane Irma as a part of FEMA / The Corps of Engineers "Operation Blue Roof" program in Monroe County (Cudjoe Key), Florida on Tuesday, Oct. 3, 2017. (Photo: J.T. Blatty / FEMA)

The Department of Homeland Security—which awarded over $23 billion in contracts, grants, and other federal assistance in fiscal year 2017—needs to improve the way it keeps track of risky awardees, according to a recent report by the agency’s Inspector General. The watchdog concluded the Department’s suspension and debarment policies and practices are falling short, making it more difficult for the agency to ensure taxpayers’ money isn’t lost to fraud, waste, and abuse.

Federal agencies use suspension and debarment to prevent individuals and companies suspected or found guilty of misconduct from receiving contracts, grants, loans, and other federal money. Suspensions and debarments aren’t used as a punishment; instead, they are used to protect taxpayers by making sure the government only does business with responsible entities.

Among the deficiencies highlighted in the report, the Department’s guidelines regarding suspensions, debarments, and administrative agreements—a remedy used in lieu of suspension and debarment—are outdated and missing needed information. In particular, the Inspector General found inadequate documentation for five of seven administrative agreements approved between 2012 and 2017.

The watchdog also determined the Department lacks an effective centralized system to track suspension and debarment activities, which may have caused the agency to publicly report inaccurate data for one year. In addition, for an eight-month period in 2016 and 2017, the Federal Emergency Management Agency (FEMA) failed to update the System for Award Management (SAM) and the Federal Awardee Performance and Integrity Information System (FAPIIS)—databases that track which individuals and companies have been barred from doing business with Uncle Sam. Fortunately, the Inspector General reported that none of the individuals and companies FEMA excluded during that reporting lapse had received funds from FEMA or any other federal agency.

The Inspector General made several recommendations for improvement, including updating suspension and debarment guidelines, devising a centralized information tracking system, enhancing information sharing within the agency, and incentivizing employees to timely report suspensions, debarments, and administrative agreements in the SAM and FAPIIS databases. The good news is that the Department agreed with all of the recommendations and is taking steps to address them. According to the report, the agency expects to fully implement all recommended fixes by the end of September this year.

The Project On Government Oversight has called for strengthening the federal suspension and debarment system and providing government contracting officials with more and better awardee accountability data. We are encouraged that the Department is increasing its usage of suspension and debarment, and that it is making improvements where necessary.