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Press Release

Federal Government’s Largest FY2010 Contractors Paid Billions in Fines, Penalties

The federal government’s largest contractors have paid more than $25.3 billon in fines and penalties for everything from price-gouging to bribing foreign governments, according to the Project On Government Oversight’s (POGO) Federal Contractor Misconduct Database (FCMD) and its new ranking of the top 100 federal contractors, which was released today.

The FCMD now includes civil, criminal, and administrative misconduct information on 160 federal contractors, and more than 1400 resolved and pending misconduct instances dating back to 1995.

Among the instances you will find in the FCMD is the $750 million in penalties GlaxoSmithKline paid for alleged quality control problems at its Puerto Rico manufacturing facility; the $35 million Halliburton paid the government of Nigeria to settle charges of participating in a bribery scheme involving the construction of a liquefied natural gas facility; and the $237.5 million Novartis paid to settle allegations that the company paid kickbacks to doctors to get them to prescribe its products.

POGO’s updated top 100 features seven new contractors, including international accounting firm Deloitte LLP, package delivery company United Parcel Service (UPS), and Mission Essential Personnel (MEP), a relatively new company that provides translators for U.S. military operations. All three bring records of misconduct to the FCMD—Deloitte has 13 instances of misconduct for which it has incurred $488 million in penalties; UPS has had 17 instances and $47 million in penalties; and MEP has three instances, all of which are related to its work in Afghanistan.

The top 100 contractors received $276 billion in contracts last fiscal year, accounting for slightly more than half of the $536 billion in contracts awarded that year. As of today, these 100 contractors have accumulated 821 misconduct instances and $25.3 billion in monetary penalties.

For 25 of the top 100 recipients of federal contracts, POGO has not found any instances of misconduct, and an additional 14 contractors have only one instance, showing once again that contractor misconduct should not be accepted as a normal cost of doing business with the government.

Of the remaining contractors with multiple instances of misconduct, Lockheed Martin, BP, and Exxon top the list with 57 instances of civil, criminal, or administrative misconduct since 1995.

As has occurred in the past, the contractor ranking contains errors. This year, the top 100 contains double listings for Booz Allen Hamilton (#29, and as “Booz Allen Hamilton Holding Corporation” at #47), Lockheed Martin (#1 and #49), and Northrop Grumman (#3 and #71).

POGO’s FCMD update follows the long-awaited April 15 public release of the federal government’s contractor responsibility database, the Federal Awardee Performance and Integrity Information System, or FAPIIS. Despite its limitations, POGO is hopeful that FAPIIS will become an indispensable resource, improving accountability for the more than $1 trillion in taxpayer dollars spent each year on federal contracts and grants.

POGO’s FCMD update also follows the August release of the Commission on Wartime Contracting’s final report to Congress. The Commission found that one out of every six dollars spent on contracts in Iraq and Afghanistan, between $31 billion and possibly as much as $60 billion, has been lost to waste and fraud. In addition to government contracting concerns, the report gave examples of poor performance or misconduct by FCMD contractors including Deloitte, DynCorp International, and KBR.

For more details, please visit POGO’s Federal Contractor Misconduct Database.