At least 3,700 private contractors receiving funding under the American Recovery and Reinvestment Act (P.L. 111-5) owe back taxes, a recent GAO report has found. The report estimates that about five percent of all contract and grant recipients under the stimulus bill were tax delinquent, though GAO noted that its sample study might greatly underestimate the extent of tax delinquency. GAO found that 3,700 contractors owed at least $757 million in taxes when receiving Recovery Act contracts or grants, but as Senator Tom Coburn (R-OK) noted at a May 24 hearing before the Senate Homeland Subcommittee on Investigations, if the rate of tax delinquency is extended to all 80,000 Recovery Act recipients, the amount of taxes owed could exceed $1 billion.

Despite spending an estimated $9 billion just to manage procurements, the Department of Homeland Security (DHS) is woefully mismanaging and overseeing its acquisition portfolio, a recent DHS Inspector General (IG) report found (OIG-11-71). DHS outsources roughly $55 billion in work per year, but has consistently displayed significant issues with internal control, reporting, and cost controls, the report says. Most notably, officials have overcomplicated many acquisitions, adding on unnecessary costs and still failing to effectively manage the procurements.

The Small Business Administration (SBA) Office of Inspector General (OIG) is “very concerned” about continued fraud among small business contracting preference programs, agency Inspector General Peggy Gustafson testified to a Senate committee. Speaking before the Senate Small Business and Entrepreneurship Committee on March 3, Gustafson cataloged numerous instances of ineligible businesses using preference programs to improperly win contracts.

DoD needs to improve how it counts its service contractors, a recent GAO report (GAO-11-192) found. The report said that, while the department has made some overall improvements, inconsistencies among the services and the systems and process used continue to hamper the department’s ability to confidently give an accurate count of its large contractor workforce.