Billions of Dollars in Federal Contracts Go to Violators of Labor Laws

Thursday, December 12, 2013
BP employee injured in Texas refinery blast (photo: Dwight Andrews, Galveston Country Daily News, AP)

The federal government has come under criticism for awarding billions of dollars in federal contracts to companies that break U.S. labor laws.


A new report (pdf) produced for Democrats on the Senate Health, Education, Labor and Pension Committee found 18 federal contractors out of the top 100 who violated wage or safety laws during a six-year period (2007-2012).


“Taxpayer dollars are routinely being paid to companies that are putting the livelihoods and the lives of workers at risk,” the report said. “Many of the most flagrant violators of federal workplace safety and wage laws are also recipients of large federal contracts.”


The investigation learned that 49 federal contractors responsible for large violations of federal labor laws were cited 1,776 times and paid $196 million in penalties and assessments—but still managed to collect $81 billion from the government for contract work.


Examples in the report included:


Imperial Sugar made $94.8 million in federal contracts in 2012, even though it paid $6 million in safety penalties for a 2008 factory explosion in Georgia that killed 14 workers.


Tyson Foods received $4.2 billion in contracts since 2000, even though the company was accused of more than $500,000 in safety penalties and 11 of its workers have died on the job since 1999. The report cited one instance when a Tyson employee was killed when nine million tons of corn fell on him after the collapse of a corn silo. In another case, a worker fell to his death when the ladder he was on slipped on a metal floor covered with grain dust.


Oil giant BP continued to receive federal contracts even after paying $20 million in safety violation fees following a 2005 Texas refinery explosion that killed 15 employees. The report was also critical of the fact that a major federal contractor database said nothing about allegations of BP’s misconduct with regard to that event or the 2010 Deepwater Horizon disaster.


The report called for the government to factor in a company’s safety and wage violations more closely before it awards contracts. But it did not recommend automatic suspension of contracts or debarring contractors found to have violated federal laws.


Federal contracts amount to about $500 billion a year for companies that collectively employ 26 million workers, which represent 22% of the country’s work force. The value of contracted services—$307 billion in 2012—has tripled since 2000, according to the report.

-Noel Brinkerhoff, Danny Biederman


To Learn More:

Study Finds Federal Contracts Given to Flagrant Violators of Labor Laws (by Steven Greenhouse, New York Times)

Acting Responsibly? Federal Contractors Frequently Put Workers’ Lives and Livelihoods at Risk (Senate Health, Education, Labor and Pension Committee) (pdf)

Contractors with Labor Law Violations Won $6 Billion in Contracts Last Year (by Noel Brinkerhoff, AllGov)


Leave a comment