James Eli Shiffer, the Star Tribune’s watchdog and data editor, digs into data and documents to uncover the news. Reach him at 612-673-4116, james.shiffer@startribune.com or follow him on Twitter at @jameselishiffer. Tell us what to investigate. Send your story tips to whistleblower@startribune.com.

$13 million in fed contracts for troubled contractor

Posted by: James Eli Shiffer Updated: May 12, 2014 - 9:34 AM

My Sunday column (here, and below) about debarments followed up on my blog post about Garcia Forest Service, a federal contractor whose labor law violations set off a long process of debarring - or disqualifing - from federal contracts for three years. Just like everything with the federal government, it's an arcane process, and one under major scrutiny in Congress, but one I plan to continue investigating.

You can download the current list of federal debarments here (go down the page to "Exclusions Extract Data Package" and click on the most recent date). The list of blacklisted Minnesota contractors is much shorter.  

Here's the column:

Two uninvited visitors showed up at a work site deep in the woods of northern Minnesota.

Inspectors from the U.S. Department of Labor had come to check on whether Garcia Forest Service LLC was properly paying its immigrant workers, who were planting trees and clearing brush for the U.S. Forest Service.

The inspectors found the payroll records were a mess. Garcia Forest Service had to pay 12 workers an additional $27,000, but the company faced a bigger consequence: losing its eligibility for federal contracts.

Nearly seven years went by. On April 24, the Labor Departmentannounced that Garcia Forest Service and company president Samuel Garcia had been “debarred” — prohibited from getting any federal contracts for three years. The Labor Department publicized this case to show how federal contractors would pay the price if they broke the law.

Instead, it looks more like a diagnosis of what’s broken with the system of blacklisted federal contractors.

As the debarment process groaned along, the federal money pipeline kept flowing to Garcia Forest Service. The company took in more than $13 million since that June 2007 visit to Tofte, Minn., by the Labor Department, according to the usaspending.gov website.

Scott Amey, general counsel for the Project On Government Oversight in Washington, has testified before Congress about strengthening the safeguards against bad contractors. He’s well aware of the sluggish pace of contractor debarments, but the seven-year wait surprised even him.

“This case highlights the need to improve the federal contractor responsibility system,” Amey said. “We need to better protect agencies and taxpayers, and hold contractors accountable.”

Founded in 1994, Garcia Forest Service is a family-owned company based in small-town North Carolina. The company’s Atlanta lawyer, Ray Perez, said his client made an “innocent mistake” in one small area of his operations.

Garcia Forest Service’s $31 million in federal contracts over the past 15 years are virtual crumbs from a government that spent $517 billion on goods and services in 2012 alone. The company’s transgressions do not compare with the colossal misdeeds of Pentagon contractors who soak taxpayers during wartime or oil companies that befoul the sea.

Still, if you’re going to send a message, putting it in a bottle and throwing it in the sea might be faster.

The Labor Department had already warned Garcia Forest Service for shortchanging its workers on holiday pay for three previous contracts when it looked into the Superior National Forest deal, which was worth $838,000. The guest workers, imported from Mexico under a H-2B visa, were shortchanged by a flawed effort to pay them on a production basis, rather than an hourly wage, according to the Labor Department. Garcia Forest Service cooperated fully with the investigation and repaid the workers, an act that the company’s attorney said was later wrongly taken as an admission of guilt.

The company could be forgiven for thinking it was still in the good graces of the government. The next year its crew was back in the Superior National Forest, and at a June 2008 ceremony at the U.S. Department of Agriculture’s monumental headquarters in Washington, Garcia Forest Service was honored with a USDA “small disadvantaged business contractor award” for its “excellent track record” with the Forest Service in Minnesota.

Since 2007, the National Park Service, the Department of Defense, the General Services Administration and other agencies have hired Garcia Forest Service for landscaping, reforestation, canal cleanouts and other dirty jobs. Meanwhile, the Labor Department’s investigation crawled to completion in 2009, and then found its way to an administrative law judge, who held a hearing in December 2012.

Scott Allen, a Labor Department spokesman, said he did not think the seven-year turnaround time for the debarment undermined its impact. “We’ll continue to press forward in enforcement and make sure that companies are doing the right thing for their workers.”

Garcia Forest Service has appealed the debarment. When that will be resolved is anybody’s guess. In the meantime, according to his lawyer, Garcia is still working on federal contracts and plans to bid on new ones.

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