Two of the companies hired by the government to implement the healthcare law are among the most penalized federal contractors for labor law infractions, according to a report from Senate Democrats.
The study, released last week by Senate Health, Education, Labor and Pensions (HELP) committee chairman Tom Harkin (D-Iowa), found that Serco Group and CGI, who together accounted for more than $1 billion in federal contracts last year, were assessed $1.8 million and $1.7 million in wage and safety penalties by the Department of Labor, respectively.
The two companies were among dozens cited in the report, many of which had more violations and larger contracts with the federal government. The report sought to highlight the largest government contractors that have multiple violations of labor law that are not accounted for in the contracting process.
Serco logged a total of 12 wage and safety violations, while CGI had 13.
The bulk of those penalties related to back wages, defined in the report as employees who were “improperly compensated” in a manner that resulted in litigation or a settlement.
“A review of the most significant back pay awards reveals a troubling overlap between companies that receive large federal contracts and companies that fail to properly compensate their employees,” the report says.
Serco was penalized nearly $1.4 million for back wages, while CGI was assessed nearly $1.6 million. Both fell in the top 20 for largest back wage assessments of federal contractors, although the bulk of CGI’s offenses may have been committed by a subsidiary prior to its purchase by CGI.
Serco landed $573 million in federal contracts last year, while CGI got $562 million.
The report says that having violations shouldn’t make a firm ineligible for federal contracts, but that officials should more closely inspect the labor records of prospective contractors.
Officials from both companies testified in front of Congress earlier this year about their roles in the problematic ObamaCare launch.
— This story was updated at 2:42 p.m. and 3:09 p.m.