Contractors in U.S. versus abroad

Jeremy Hobson Mar 24, 2008


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.

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