A Senate bill that would give federal contract employees the same whistleblower protections as federal employees passed the Senate Homeland Security and Governmental Affairs Committee today.
Senate bill 241, introduced by Sen. Claire McCaskill, D-Mo., would protect contractors who report improper spending or management on federal contracts from retaliation.
Contract employees who witness contract fraud currently can bring a civil claim, in the name of the government, against contractors under the False Claims Act. If the claim is successful, the whistleblower could receive up to 30 percent of the recovered funds.
However, the False Claims Act does not protect whistleblowers who witness waste, mismanagement and other illegal activities, the Project on Government Oversight (POGO) said in a statement Wednesday. POGO and other government accountability groups voiced support for the bill earlier this week.
“These contractors are on the front lines and often put themselves at great personal risk to protect the public and expose waste,” POGO said. “This new act would bridge the gaps in current coverage, and comprehensively apply best-practice protections similar to those in the stimulus to all federal funds recipient whistleblowers.”
Under the bill, contract employees that have been demoted, fired or otherwise discriminated against for reporting contract waste and abuse could submit a complaint to an inspector general. The inspector general would then have 180 days to decide if they want to investigate the complaint. If the complaint is investigated, the inspector general must report the findings to the employee who made the complaint, the complainant’s employer and the head of the government agency holding the contract.
A Kuwaiti company was indicted for overcharging the government on an $8.5 billion food service contract to feed troops in Iraq, Kuwait and Jordan, the Justice Department announced today.
The company, Public Warehousing Company (PWC), faces criminal charges of conspiracy to defraud the government, committing major fraud against the government, making false statements to the government, submitting false claims to the government and wire fraud. The allegations stem from a series of false invoices the company submitted to the Defense Department between 2003 and 2005.
According to Justice, the company conspired with unnamed suppliers to inflate prices by hiding overhead costs in the prices the suppliers charged PWC. The contract did not allow the company to bill for overhead. In addition, PWC failed to pass along discounts from suppliers to the government, as required by the contract.
The company faces a sentence of probation and a fine of twice the losses to the government on the criminal charges. In addition to the criminal case, the Justice Department also announced today that it joined a civil whistleblower suit against PWC; its subcontractor, The Sultan Center Food Products Company; and PWC’s chief executive officer Tarek Abbul Aziz Sultan Al-Essa. The government could collect triple the damages under the civil suit filed under the False Claims Act.
Both the civil and criminal allegations are still under investigation and case files remain under seal.