Businesses and individuals that have been excluded for egregious offenses ranging from national security violations to tax fraud are improperly receiving federal contracts and other funds, GAO has said.
Agencies can exclude parties from receiving federal contracts or assistance for a range of offenses and GAO developed cases on a number of them, finding that they received funding for a number of reasons, including because agency officials failed to search the GSA Excluded Parties List System, or because their searches did not reveal the exclusions.
GAO also identified businesses and individuals that were able to circumvent the terms of their exclusions by operating under different identities, according to GAO-09-174.
It said the Army debarred a German company after its president tried to sell nuclear bomb parts to North Korea, and despite labeling the individual "morally bankrupt," the Army said it couldn’t figure out how to cancel the contract so it paid the company $4 million in 2006. GAO said multiple avenues were open to the Army to cancel the contract.
According to the report, the Navy suspended a company whose employee used nonconforming parts to replace fasteners on steam pipes but awarded it more contracts because a contracting officer did not check EPLS.
Most of the improper contracts and payments GAO identified can be attributed to ineffective management of the EPLS database or as a result of not entering exclusions or checking EPLS prior to making awards, said GAO.
