Current Agency Policy and Guidance on the Payment of Recruitment Fees Do Not Provide Clear Instructions

Agency policy and guidance on combating trafficking in persons has  attempted to address the payment of recruitment fees by foreign workers  on certain U.S. government contracts. We found that some agency officials, both on contracts in our sample and  on others, and contractors in our sample did not have a common  understanding of what constitutes a permissible fee related to  recruitment—in terms of components or amount—or whether contractors  or subcontractors at any level were permitted to charge such fees to  recruited employees. DOD contracting officials in Kuwait said that a definition of recruitment  fees would improve their ability to implement the government’s  antitrafficking policy. Some Foreign Workers Employed on U.S. Contracts Paid Recruitment Fees to Subcontractors or Recruitment Agencies

On at least two contracts in our sample, including the one employing the  largest number of foreign workers, contractors reported that workers have  paid for their jobs. According to the subcontractor who employed all 82 of  these workers, these fees were likely paid to an agent who assisted  foreign workers with transportation and housing prior to being hired for  work on the U.S. government contract. Some of these workers  reported paying more than 1 year’s salary in such fees. 1). For example, we found that agencies  did not specifically monitor for labor practices on some contracts, but  rather focused on contractor-provided goods and services, such as  building construction. For some  contracts in our sample, DOD and State had specific processes to  monitor efforts to combat TIP. On Some Contracts, Agencies’ Monitoring Efforts Were Limited to Contractor-Provided Goods and Services

For 4 of the 11 contracts in our sample, agency officials stated that they  did not specifically monitor contractor labor practices or efforts to combat  TIP, as their monitoring processes were primarily focused on contractor-  provided goods and services. However, without efforts to  specifically monitor labor practices or efforts to combat TIP, agencies’  ability to detect such concerns is limited, and they cannot ensure that  foreign workers are being treated in accordance with the U.S.  government’s zero tolerance policy regarding trafficking in persons. Some Contracting Officials Were Unaware of Their Monitoring Responsibilities to Combat TIP

Some DOD and State contracting officials were unaware of relevant  acquisitions policy and guidance for combating TIP and did not clearly  understand their monitoring responsibilities. For  example, State officials reported that a security contract in Iraq required  the contractor to provide return travel for its foreign workers and that this  requirement was discussed with the contractor at the end of the  contract. Recommendations for Executive Action

To help ensure agencies can more fully implement their monitoring policy  and guidance related to recruitment of foreign workers, the Secretaries of  Defense and State and the Administrator of the U.S. Agency for  International Development should each develop, as part of their agency  policy and guidance, a more precise definition of recruitment fees,  including permissible components and amounts. Our objectives were to  examine (1) policies and guidance governing the recruitment of foreign  workers and the fees these workers may pay to secure work on U.S.  government contracts overseas and (2) agencies’ monitoring of contractor  efforts to combat TIP. On the basis  of this comparison, we selected 11 contracts that represent nearly one- third of all reported foreign workers employed on contracts awarded by  these three agencies as reported in SPOT. The Department of Defense  (DOD), Department of State (State), and the U.S. Agency for International  Development (USAID) have developed policy and guidance that provides  more specificity on these practices, as outlined in table 6. State noted that the new regulations that will amend the Federal Acquisition  Regulation will prohibit charging employees recruitment fees. 2.
Why GAO Did This Study

Since the 1990s, there have been allegations of abuse of foreign workers on U.S. government contracts overseas, including allegations of TIP. In 2002, the United States adopted a zero tolerance policy on TIP regarding U.S. government employees and contractors abroad and began requiring the inclusion of this policy in all contracts in 2007. Such policy is important because the government relies on contractors that employ foreign workers in countries where, according to State, they may be vulnerable to abuse.
GAO was mandated to report on the use of foreign workers. This report examines (1) policies and guidance governing the recruitment of foreign workers and the fees these workers may pay to secure work on U.S. government contracts overseas and (2) agencies' monitoring of contractor efforts to combat TIP. GAO reviewed a nongeneralizable sample of 11 contracts awarded by DOD, State, and USAID, composing nearly one-third of all reported foreign workers on contracts awarded by these agencies at the end of fiscal year 2013. GAO interviewed agency officials and contractors about labor practices and oversight activities on these contracts.

What GAO Found

Current policies and guidance governing the payment of recruitment fees by foreign workers on certain U.S. government contracts do not provide clear instructions to agencies or contractors regarding the components or amounts of permissible fees related to recruitment. GAO found that some foreign workers—individuals who are not citizens of the United States or the host country—had reported paying for their jobs. Such recruitment fees can lead to various abuses related to trafficking in persons (TIP), such as debt bondage. For example, on the contract employing the largest number of foreign workers in its sample, GAO found that more than 1,900 foreign workers reported paying fees for their jobs, including to recruitment agencies used by a subcontractor. According to the subcontractor, these fees were likely paid to a recruiter who assisted foreign workers with transportation to and housing in Dubai before they were hired to work on the contract in Afghanistan (see figure). Some Department of Defense (DOD) contracting officials GAO interviewed said that such fees may be reasonable. DOD, the Department of State (State), and the U.S. Agency for International Development (USAID) have developed policy and guidance for certain contracts addressing recruitment fees in different ways. However, these agencies do not specify what components or amounts of recruitment fees are considered permissible, limiting the ability of contracting officers and contractors to implement agency policy and guidance.
GAO found that agency monitoring, called for by federal acquisition regulations and agency guidance, did not always include processes to specifically monitor contractor efforts to combat TIP. For 7 of the 11 contracts in GAO's sample, DOD and State had specific monitoring processes to combat TIP. On the 4 remaining contracts, agencies did not specifically monitor for TIP, but rather focused on contractor-provided goods and services, such as building construction. In addition, some DOD and State contracting officials said they were unaware of relevant acquisitions policy and guidance for combating TIP and did not clearly understand their monitoring responsibilities. Both DOD and State have developed additional training to help make contracting officials more aware of their monitoring responsibilities to combat TIP. Without specific efforts to monitor for TIP, agencies' ability to implement the zero tolerance policy and detect concerns about TIP is limited.

What GAO Recommends

GAO recommends that agencies (1) develop a more precise definition of recruitment fees and (2) ensure that contract monitoring specifically includes TIP. DOD concurred with the first recommendation, while State and USAID noted that forthcoming regulations would prohibit all recruitment fees. Agencies concurred with the second recommendation.