Bill would bar contracting with delinquent companies

If you haven’t paid your taxes, Uncle Sam isn’t going to give your company the defense contract.

The bill was approved by the House Armed Services Committee earlier this week, and would give the government about $1 billion a year through additional taxes.

The tax-delinquent provision is an amendment to the committee’s acquisition act that gives managers more flexibility to shift acquisition work from one organization to another, and also provides pay and promotion incentives for people who work to make the DoD’s financial management system more accountable and accurate.

The provision requires contracts to certify they don’t have delinquent tax debts exceeding $3,000 when they big on projects, and authorizes the Treasury Department to disclose tax information to contracting agencies. There is an exception for contracts that involve national security.

In April 2007, the Government Accountability Office reported that more than 60,000 federal contractors owed a total of $7.7 billion in unpaid taxes – including 27,000 defense department contractors.

The bill is expected to be heard before the full house next week, and is expected to apply to nearly 80 percent of defense contracts.