According to a New York Times report yesterday, the U.S. Federal government frequently does business with, and renews contracts with, companies that frequently violate labor laws:
"... 18 federal contractors — including Imperial Sugar — were among the recipients of the largest 100 penalties issued by the Occupational Safety and Health Administration from 2007 to 2012. The report found that 32 federal contractors were among the leading companies in the amount of back pay assessed for wage violations between 2007 and 2012... 49 federal contractors responsible for large violations of federal labor laws were cited for 1,776 separate violations of these laws and paid $196 million in penalties... In fiscal year 2012, these same companies were awarded $81 billion in taxpayer dollars."
The Congressional report was issued for the Health, Education, Labor, and Pension Committee. Some specific examples from the report:
"Imperial Sugar had $94.8 million in federal contracts last year, even though it paid $6 million in safety penalties over a 2008 factory explosion in Georgia that killed 14 workers. The report also noted that the federal government had awarded $4.2 billion in contracts to Tyson Foods since 2000, even though Tyson has faced more than $500,000 in safety penalties since 2007 and 11 of its workers have died on the job since 1999."
It seems that the Federal government should factor more heavily violations into its decisions to award contracts, and the report recommends this change. The Federal government awards about $500 billion in contracts every year.
After reading this, I wonder if state governments are better, or worse, at awarding contracts to repeat offenders -- and which states perform the best.