Senator Hillary Clinton Calls for GAO Investigation of Government Contracts

Contractors Allegedly Violated Small-Business Laws

August 12, 2008 -- WASHINGTON, DC—Following release of a Congressional Budget Office report today showing the massive expenditures and an over-reliance on private contractors in Iraq under the Bush Administration and the revelation of a report by the Small Business Administration Inspector General showing Blackwater was awarded millions of dollars in federal contracts designated for small businesses, Senator Hillary Rodham Clinton today called on Congress to act on her legislation to reform the contracting system and put in place needed accountability measures and urged the Government Accountability Office (GAO) to launch an investigation into the impact of Blackwater’s violation.

“This administration’s failure to hold contractors accountable is outrageous. More and more government responsibilities are being passed along to private companies at huge cost to American taxpayers, and at the same time, more and more reports emerge of fraud, waste and abuse in the contracting process. This pattern must be brought to an end, which is why I have introduced legislation to bring critically needed reform to the government contracting process and why I’m calling for an investigation to get to the bottom of this latest abuse of taxpayer resources,” said Senator Clinton.

A report issued by the Small Business Administration’s Inspector General found that from 2005 to 2007, Blackwater Worldwide and its affiliates won 39 government contracts that were designated for small businesses. According to the report, the contractors circumvented small business size criteria for earnings and number of employees in order to qualify for the contracts. Another report released today by the Congressional Budget Office revealed that the Bush Administration has spent $100 billion on private contractors in Iraq since the 2003 invasion, heightening concerns that too many government responsibilities are being contracted out to private companies.

Senator Clinton has championed efforts to overhaul the federal contracting process. In June, she introduced the Oversight of the Performance and Effectiveness of National (OPEN) Contracting Act, legislation that would promote accountability for contractors, restore competition and transparency in the contracting process, and reduce the federal government’s overreliance on private contractors performing critical government functions. A provision of the legislation would reduce the amount of inherently governmental work being performed by private contractors. Last year, she secured into law a measure that stopped the outsourcing of critical national security jobs.

In addition to introducing the OPEN Contracting Act, Senator Clinton introduced legislation in April that would prevent contactors that violated criminal laws from obtaining federal contracts. Additionally, she wrote to the Director of the Office of Management and Budget calling on the administration to move quickly to close loopholes in proposed rules that would allow federal contractors to hide criminal fraud, waste and abuse. She secured into law a measure prohibiting a practice that rewarded underperforming private contractors. Additionally, Senator Clinton offered an amendment to the FY 2009 Budget Resolution calling for a one-year moratorium on abusive and unchecked no-bid contracts that have become commonplace under the Bush Administration and cost taxpayers at least $200 billion in fiscal year 2007.

Source: Senator Hillary Clinton

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