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REPORT: Billion Dollar Government Contracts Going to Repeat Health and Safety Code Violators

Sen. Tom Harkin, HELP Committee Chairman

Sen. Tom Harkin, HELP Committee Chairman

A new report from the Congressional Health, Education, Labor, and Pensions (HELP) Committee shows that the federal government awards contracts worth tens of billions of dollars to companies who routinely violate health and safety codes. Wednesday morning, HELP Chairman Sen. Tom Harkin spoke to the Center for American Progress Action Fund and revealed the report, “How the Federal Contracting System Harms Workers and Taxpayers.”  The paper suggests possible reforms that could ensure worker safety and promote accountability for contractors on which the federal government spends $500 billion annually.  It urges the government to weigh a company’s safety record and wage violations more heavily when granting federal contracts:  

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

One example of a contractor receiving contracts despite a track history of safety and wage violation is Imperial Sugar, which The New York Times took on a piece this week:

For instance, Imperial Sugar had $94.8 million in federal contracts last year, even though it paid $6 million in safety penalties over a 2008 factory explosion in Georgia that killed 14 workers. The report also noted that the federal government had awarded $4.2 billion in contracts to Tyson Foods since 2000, even though Tyson has faced more than $500,000 in safety penalties since 2007 and 11 of its workers have died on the job since 1999.

The HELP report provides the following details about the contractors in question:

Eighteen federal contractors were recipients of one of the largest 100 penalties issued by the Occupational Safety and Health Administration (OSHA) of the Department of Labor between 2007 and 2012. Almost half of the total initial penalty dollars assessed for OSHA violations were against companies holding federal contracts in 2012.

  • Forty-two American workers died during this period as a result of OSHA violations by companies holding federal contracts in 2012.
  • Thirty-two federal contractors received back wage assessments among the largest 100 issued by the Wage and Hour Division of the Department of Labor between 2007 and 2012.
  • Thirty-five of these companies violated both wage and safety laws.
  • Overall, the 49 federal contractors responsible for large violations of federal labor laws were cited for 1,776 separate violations of these laws and paid $196 million in penalties and assessments. In fiscal year 2012, these same companies were awarded $81 billion in taxpayer dollars.  

Harkin and company also call on the Obama Administration to require contracting officers to check with the Department of Labor when deciding if a contractor meets the responsibility standards to qualify for a government contract. Steve Posner, a spokesman for the Office of Management and Budget, told NYT: “The administration is committed to ensuring that our government is doing business only with contractors who place a premium on integrity and good business ethics. We have taken aggressive steps to hold contractors accountable.”

Finally, the report reveals that the database of major contractors required by the Clean Contracting Act of 2008 was missing several major incidents such as BP’s misconduct in both Texas City and on the Deepwater Horizon. Three other major cases were left out of the database as well:

  • The death of a 46-year-old father of four, who was working as a washroom operator at a Cintas Corporation facility in Tulsa, Oklahoma. He was killed after being swept into an industrial dryer when he attempted to dislodge a clothes jam. The dryer continued to spin with him inside for 20 minutes at over 300 degrees. Cintas received $3.4 million in federal contracts in fiscal year 2012.
  • The death of two employees of a Mississippi shipbuilding and ship repair company owned by ST Engineering Limited, who were killed when highly flammable materials being used to prepare a tugboat for painting ignited, leading to an explosion and fire. Findings of the investigation included failure to properly ventilate a confined space and lack of a rescue service available for a confined space. ST Engineering received $1.9 million in federal contracts in fiscal year 2012.
  • The deaths of seven workers at an Anacortes, Washington refinery owned by Texas based Tesoro Corporation, who were killed when a heat exchanger ruptured and spewed vapor and liquid that exploded. The workers who died were standing near the area of the rupture specifically to attempt to stop leaks of the volatile, flammable gases in the facility which had not been inspected for 12 years prior to the rupture. Tesoro received $463 million in federal contracts in fiscal year 2012.

The report in its entirety is here.

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