Close the Contractor Fraud Loophole Act

CLOSE THE CONTRACTOR FRAUD LOOPHOLE ACT -- (House of Representatives - April 23, 2008)

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Mr. THOMPSON of Mississippi. Mr. Speaker, I rise today in support of H.R. 5712, the ``Close the Contractor Fraud Loophole Act.''

The name of this bill really says it all. Today, as I speak, there is a loophole in Government procurement regulations that allows some contractors to avoid reporting violations of Federal law or overpayments.

The privilege--and, yes, it's a privilege--of earning Federal dollars carries with it certain responsibilities. One of those responsibilities is to do your utmost to avoid fraud, violations of law, and overpayments. Now, I understand that many large contractors have thousands of employees, and sometimes there can be a bad apple. But when a contractor learns of such a bad apple, it is its responsibility to report what it learns to the Government, and to make the Government whole for any loss.

Today, most contractors working in the United States are required by regulation to do just this. But contractors working overseas, and a few here in the U.S., fall outside this simple, commonsense reporting requirement.

This is not right--contractors accepting Federal dollars should be treated the same, whether they are performing the work in the United States or overseas, and regardless of whether they are selling ``commercial items.''

I want to commend Mr. Welch and Chairman Waxman for recognizing this problem, and for doing something about it. Now that they have acted, the administration says that this loophole was a ``bureaucratic mistake'' and should be closed. Yet, before Congress moved, the administration was curiously slow to do anything to address this ``mistake.''

My committee has devoted a lot of time and energy to examining the Department of Homeland Security's contracting practices. What we have found is not always pretty. The Department is young, and has made some poor contracting decisions. But poor decisionmaking and the occasional inexperienced contracting officer is not a license for abuse, and it is incumbent on any contractor who discovers such abuse to report it.

I hope the administration makes good on its word and closes this loophole, but I'm mindful that it took congressional oversight and action to stir them into action. This is oversight at it best, and make no mistake, our oversight--of both the Government and the contractors themselves--will continue. I encourage all of my colleagues to support this legislation.

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