More than 3,800 General Services Administration
contractors — about 10 percent – had tax debts,
amounting to $1.4 billion as of last June for a
period covering fiscal 2004 and most of fiscal 2005,
the Government Accountability Office has said.
However, it said contracting officers are not
required to take debt into consideration when
making initial awards or authorizing extensions
to existing contracts through GSA’s federal
supply schedule or other interagency contracts,
even if the basis of a decision is a price
differential among bids from competing companies.
That would make it more difficult for companies
that pay their taxes to compete with those that
don’t.
Further, federal law generally prohibits the
isclosure of taxpayer data, so contracting officers
don’t have access to tax data directly from the
IRS, according to GAO-06-492T.
After investigating 25 GSA contractors that had not
forwarded payroll taxes withheld from their
employees and other taxes to IRS — a felony if
done willfully — GAO found that some company owners
had diverted payroll taxes for personal gain or to
fund their businesses.
The contractors worked for a number of federal agencies
including the departments of Defense, Justice, and
Homeland Security, GAO said.
It said a number of the owners or officers of the 25
companies have significant personal assets and spent
recklessly on non-business related activities and
items while not paying tax debt, but their companies
continue to receive government business.