Crowdsourcing Contractor Misconduct

The Sunlight Foundation has a post today that combines several of our favorite topics: crowdsourcing, collaboration and contractor misconduct (try saying that five times fast):

Last week, the House approved a motion to recommit to a student loan bill that banned funding to the community organization ACORN after employees of the group were videotaped offering advice to two people posing as a pimp and a prostitute on how to file fraudulent tax forms. Unfortunately for those seeking to target ACORN, there is no way to single out one organization from receiving federal funds. Therefore the bill drafters banned any organization under investigation for or having been found guilty of committing contracting fraud from receiving federal funds. (The bill also bans federal funds for any organization that violates federal or state election, campaign finance or lobbying disclosure laws.) While this may have seemed like a smart idea, it winds up applying to a large number of defense contractors and others.

The author then points out that a quick search of POGO's Federal Contractor Misconduct Database quickly reveals an impressive list of more than 750 instances of fraud or misconduct, worth many times the amount of federal funding ACORN has received. In response, Rep. Alan Grayson, D-Fla., has posted a request on his Web site asking the public to submit instances of contractor fraud to be included in the bill's legislative history. Even better, Grayson is using the the power of the cloud via Google Apps to collect the submissions.

The main point seems to be that the bill aimed at restricting funding from ACORN is overly broad in its language and could have a detrimental effect on contractors who have settled fraud cases in the past. However, it's fair to ask whether contractors that have been found guilty of fraud should face additional scrutiny.

We've seen a number of instances of contractor fraud over the past few years and the common thread has been a lack of oversight on the part of the federal government. Companies that have been found guilty of fraud in the past should be held accountable for their actions. While often these crimes can be the result of just one or a few rogue employees, the fact remains that every fraud case erodes the public trust in the government's stewardship of taxpayer funds. A modified version of the bill that gives contracting preference to companies that haven't been found guilty of fraud may be in order. Companies will also have a compelling reason to make sure their employees are behaving ethically: preservation of their bottom line.