GAO finds DOD contractors have made progress on ethics

A Government Accountability Office review of the ethics programs of 57 top Defense Department contractors found that a majority have implemented programs that comply with the Federal Acquisition Regulation (FAR), but some areas still need improving.

DOD has improved its guidelines for new ethics requirements for contractors and has established a Contractor Disclosure Program, which requires federal contractors to disclose ethics violations, both of which GAO cited as acheivements.

Previously, those disclosures were self-policed, but the White House has pushed for increased federal oversight to prevent fraud and other violations of ethical conduct by contractors.

However, GAO also found DOD hasn't clarified a chain of command for administrative oversight of contractors, and said authority for oversight is not explicit nor is organizational responsibility clear.

One serious failing that GAO found is that contractors who have their own ethics programs and hotlines to report problems aren't required to display posters with DOD's hotline information. However, the DOD hotline's use includes special protections for whistleblowers that company hotlines do not, GAO noted, and employees should be aware of that.

For the report, GAO audited 57 contractors receiving more than $500 million in DOD contractor awards in 2006.

Its findings come during a push for tougher controls on government contractors, particularly those involved in defense and procurement. In December, the Federal Acquisition Regulation was amended to require contractors to report allegations of misconduct. Rep. Henry Waxman (D-Calif.) and President Barack Obama have called for reforming defense contractors' practices, with Waxman convening hearings that showcased fraud, waste and abuse by contractors.

“I reject the notion that we have to waste billions of taxpayer dollars to keep this nation secure. When it comes to purchasing weapons systems and developing defense projects, the choice we face is between investments that are designed to keep the American people safe and those that are simply designed to make a defense company or contractor rich,” Obama said May 22 at the signing of the Weapons Systems Acquisition Reform Act.