President Obama released a memorandum to federal agencies today, stating that he will hold accountable federal contractors that have been delinquent in paying taxes. The memo points out that a recent Government Accountability Office (GAO) study found that government contractors owe an estimated $5 billion in unpaid taxes.
Penalties could include preventing those delinquent contractors from being awarded new contracts. The President’s move follows years of legislative failures on this issue.
We welcome the President’s action, which provides another tool to prevent companies with questionable track records from receiving federal contracts. With tax season upon us, it’s nice to know that contractors will be paying their fair share and answer to Uncle Sam. It’s unfortunate that previous tax cheat laws languished in Congress.
-- Scott Amey
We have seen a legislative fix in this area before (110th Cong. HR 752), but now the House Armed Services Committee is on the beat. It proposed H.R. 5013, the "Implementing Management for Performance and Related Reforms to Obtain Value in Every Acquisition Act of 2010" (the "IMPROVE Acquisition Act). That bill includes a provision (Sec. 403) requiring contractors to disclose delinquent federal tax debts exceeding $3,000.
FAR Subpart 52.209-5 (Certification Regarding Responsibility Matters) already requires some reporting about tax issues, but the provision in HR 5013 goes much further, and it should prevent tax cheats from receiving new federal contract awards.
Posted by: Scott Amey | Apr 19, 2010 at 03:54 PM