Summary

The federal government spends roughly $200 billion annually on contracts for goods and services. Some companies continue to be awarded contracts every year even though they violate federal laws intended to protect worker health and safety. Legislation now pending before Congress would restrict companies that violate the Occupational Safety and Health Act from receiving federal contracts. Another proposal would reward companies for responsible behavior by reducing taxes and offering preferences to firms that train workers and take other steps to promote the economic security of their employees. This report (1) determines how many companies receiving federal contracts have also been assessed penalties for violating occupational safety and health regulations, (2) describes the characteristics of these contractors and their contracts, (3) describes the kinds of violations for which these contractors were cited, and (4) identifies ways to improve contractor compliance with workplace safety and health requirements.

GAO found that: (1) federal contracts are awarded to employers violating the Occupational Safety and Health Act (OSHA); (2) in fiscal year (FY) 1994, 261 federal contractors received penalties of at least $15,000 for violating OSHA regulations; (3) 5 percent of these contractors received more than $500 million in federal contracts; (4) contract violations typically occurred at worksites with fewer than 500 employees and at manufacturing plants; (5) federal contractors received $38 billion in contract dollars for FY 1994; (6) most of the contract violations involved companies' failure to protect their workers from electrical hazard or injury; (7) the actual penalties assessed during contractor worksite inspections totalled $10.9 million; (8) in 8 percent of those inspections, the contractor received a penalty of at least $100,000; (9) some of the federal contractors participated in the OSHA Voluntary Compliance Program; (10) OSHA contracting and debarring officials use safety and health compliance information to make their award decisions; and (11) federal contractors would be more attentive to their safety and health practices if OSHA gave greater priority to those high-hazard workplaces operated by federal contractors.