On Wednesday January 20th, President Obama sent a loud and clear message to potential and current government contractors : if you wanna play, you had better pay.
Federal Agency Chiefs have been directed to bar companies delinquent in their taxes from receiving government contracts.
The IRS has also been instructed to take necessary steps to assure companies are not lying about their tax status in their bids.
Stan Soloway, President of the Professional Services Council, doesn’t believe anyone should be surprised by the new order:
“What the President really did was take the next step in a process we’ve been going through for the last couple of years. What he did was basically say — ‘Look, we now have a law and we now have regulations that say we’re not going to give contracts to people who are delinquent in their taxes. What I want to do is make sure we have the system in place to see if it’s working’.”
Although he was also quick to note that the decision does not stem from a large amount of suspected tax fraud. Nor does the order state that a company automatically becomes ineligible if it has a delinquency.
“Companies and institutions have all kinds of delinquencies, because they may be negotiating with the IRS or in an appeal process with the IRS, or what have you. This can go on for years. The idea of elevating it is . . . you [give] it to somebody who can make some assessment as to whether they are really done with adjudication process and just thumbing their nose [at the system], or are they actually in an active negotiation?”