	Background

The Department of Labor and the National Labor Relations Board (NLRB)  are responsible for enforcing many of the country’s most comprehensive  federal labor laws ranging from occupational health and safety to  minimum wage, overtime pay, and the rights of employees to bargain  collectively with their employers. Federal Government Awards Contracts to Companies with Wage Assessments and Health and Safety Citations

The federal government has awarded contracts to companies that had  been cited for large back-wage liabilities by Labor. Restricting our analysis  to the 50 largest WHD assessments from fiscal year 2005 through fiscal  year 2009, we found that over 60 percent of these assessments were made  against companies that subsequently received contracts in fiscal year 2009. Specifically, we found that 25 out of the 50 largest WHD assessments were  charged to 20 federal contractors. According to FPDS-NG,  the federal government awarded over $9 billion in federal contract  obligations to these 20 contractors during fiscal year 2009. Further, we do not know the extent, if any, that contracting  officers considered WHD assessments in the awarding of the federal  contracts. The federal government has also awarded contracts to companies that  Labor has assessed large fines against for violating health and safety  regulations. From our analysis of the 50 largest OSHA fines for health and  safety violations for closed investigations from fiscal year 2005 through  fiscal year 2009, we found that almost 40 percent of these fines were made  against companies that subsequently received federal contracts in fiscal  year 2009. Specifically, we found that 8 of the 50 largest OSHA fines were  made against 7 other federal contractors for safety violations. Currently, the inspection databases maintained by OSHA, WHD, and NLRB  do not contain DUNS numbers for all their cases. As such, the full extent of the federal  government’s contracts awarded to companies with wage, health and  safety, and collective bargaining violations is unknown. Examples of Federal Contractors That Were Cited for Violating Federal Labor Laws

Each of the 15 companies we reviewed were cited for failing to follow  wage, health and safety, or collective bargaining laws enforced by WHD,  OSHA, and NLRB, respectively. Seven of these companies also had other  types of violations, such as hiring undocumented workers, violating  environmental standards, fraudulently billing Medicare and Medicaid, and  billing for services not rendered. According to FPDS-NG, these 15  companies received over $6 billion in federal contract obligations in fiscal  year 2009.
Why GAO Did This Study

In fiscal year 2009, the federal government obligated over $500 billion on government contracts. Some in Congress are concerned that private companies may be awarded federal contracts even though they had been cited for violating federal laws that are meant to ensure that employees receive proper wages, have the right to bargain collectively, and are not subject to work-site hazards. GAO was asked to (1) investigate the extent to which companies that received federal contracts during fiscal year 2009 had been assessed the 50 largest monetary penalties for closed inspections of occupational safety, health, and wage regulations for fiscal years 2005 through 2009, and (2) develop case studies of federal contractors that have been assessed occupational safety, health, wage, and collective bargaining penalties. To perform this work, GAO obtained and analyzed concluded wage and health and safety inspections from the Department of Labor's Wage and Hour Division (WHD) and Occupational Safety and Health Administration (OSHA) for fiscal years 2005 to 2009. GAO also obtained labor union organization and bargaining violations from the National Labor Relations Board (NLRB). To determine the value of contracts awarded to GAO's case-study companies, GAO analyzed Federal Procurement Data System-Next Generation (FPDS-NG) data for fiscal year 2009

What GAO Found

The federal government awarded contracts to companies that previously had been cited for violating wage regulations enforced by WHD and health and safety regulations enforced by OSHA. GAO did not evaluate whether federal agencies considered or should have considered these violations in the awarding of federal contracts, thus no conclusions on that topic can be drawn from this analysis. Of the 50 largest WHD wage assessments during fiscal years 2005 through 2009, 25 wage assessments were made against 20 companies that received federal contracts in fiscal year 2009. From GAO's analysis of OSHA data, GAO also found that 8 of the 50 largest workplace health and safety penalties assessed during the same time frame of fiscal years 2005 through 2009 were assessed against 7 other companies that received federal contracts in fiscal year 2009. Because OSHA and WHD databases do not contain Data Universal Numbering System numbers, GAO's analysis was limited to the 50 largest WHD assessments and OSHA penalties, which GAO manually searched. Because of this, the full extent of the federal government's contracts awarded to companies cited for labor violations is not known. GAO investigated 15 federal contractors cited for violating federal labor laws enforced by WHD, OSHA, and NLRB. The federal government awarded these 15 federal contractors over $6 billion in government contract obligations during fiscal year 2009. Several of these companies also had other types of violations, such as hiring undocumented workers, violating environmental standards, and fraudulently billing Medicare and Medicaid.