Contractors in U.S. versus abroad

Jeremy Hobson Mar 24, 2008

TEXT OF STORY

Scott Jagow: The U.S. government spends at $350 billion a year on contracts. A lot of that money is spent overseas, and it can be hard to keep track of it. That’s why some House Democrats don’t like the Bush Administration’s latest approach to contracts. Jeremy Hobson explains.


Jeremy Hobson: Members of Congress are focusing on a loophole in a proposed new rule for government contractors working abroad. For them, reporting fraud would be voluntary — while it would be mandatory for contractors here in the U.S. The question is, did contractors ask the administration for a favor?

Congressman Peter Welch co-signed a letter demanding the administration turn over relevant documents.

Peter Welch: I don’t think you could ask any average citizen whether there should be a distinction made where we say it’s OK to rip off taxpayers when we’re spending money in Iraq or Afghanistan, but not if we’re spending it in Mississippi or Vermont. It makes absolutely no sense.

Alan Chvotkin: It’s not a loophole that says that you can commit fraud overseas.

That’s the other side from Alan Chvotkin. His organization, the Professional Services Council, represents about 300 government contractors. He says voluntary reporting is sufficient, and if contractors allow fraud, the government can respond by denying them future contracts.

In Washington, I’m Jeremy Hobson for Marketplace.

Marketplace is on a mission.

We believe Main Street matters as much as Wall Street, economic news is made relevant and real through human stories, and a touch of humor helps enliven topics you might typically find…well, dull.

Through the signature style that only Marketplace can deliver, we’re on a mission to raise the economic intelligence of the country—but we don’t do it alone. We count on listeners and readers like you to keep this public service free and accessible to all. Will you become a partner in our mission today?

Your donation is critical to the future of public service journalism. Support our work today – for as little as $5 – and help us keep making people smarter.