Tuesday, July 30, 2024: U.S. GAO Published Report on Federal Agencies’ Management of Human Trafficking Risks in Contracts
GAO Found Agencies Need to Adopt a Systematic Approach to Manage Risks in Contracts
Federal agencies should adopt a systematic approach to managing human trafficking risks in contracting, the U.S. Government Accountability Office (“GAO”) concluded in a new Report. Since 2000, Congress has increased requirements to prevent trafficking in federal contracting, but related trafficking allegations continue, GAO observed. Issuing nine specific recommendations, GAO called for federal agencies to implement a systematic approach that identifies, responds to, and communicates about, risks and needed responses.
How Does the Applicable Law Define “Human Trafficking”?
The Federal Acquisition Regulation (“FAR”) – at Subpart 22.17 – implements the Federal Property and Administrative Services Act (40 U.S.C. 101 et seq.), the Trafficking Victims Protection Act of 2000, as amended (“TVPA”; 22 U.S.C. 78, Division A), and President Obama’s Executive Order 13627 of September 25, 2012. These laws all apply the definition of “severe forms of trafficking in persons” (“trafficking” or “trafficking in persons”) contained in Section 103 of the TVPA (22 U.S.C. 7102(8)), to include (1) “sex trafficking in which a commercial sex act is induced by force, fraud, or coercion, or in which the person induced to perform such act has not attained 18 years of age,” or (2) “the recruitment, harboring, transportation, provision, or obtaining of a person for labor or services, through the use of force, fraud, or coercion, for the purpose of subjection to involuntary servitude, peonage, debt bondage, or slavery.”
Application to Federal Contracts
The Report (at pdf pages 5-6) explains that:
“[t]he FAR implements U.S. policy prohibiting trafficking activities in acquisitions through requirements for awareness, compliance, and enforcement to prevent trafficking in or related to government-funded contracts. Since 2007, it has required all U.S. government contracts to include a clause prohibiting trafficking. In January 2015, the FAR Council amended the FAR clause to clarify prohibited practices. The FAR now requires prime contractors to establish and adhere to an anti-trafficking compliance plan for certain contracts and ensure that subcontractors and agents do so as well. An agent is any individual authorized to act on behalf of the organization, including a director, an officer, an employee, or an independent contractor.” [citation omitted]
What Did the Report Find?
GAO focused its Report on four agencies that it identified as having significant contract spending or heightened risk of trafficking – the Departments of Homeland Security (“DHS”), Defense (“DOD”), and State and the U.S. Agency for International Development (“USAID”).
On October 21, 2019, the White House Office of Management and Budget (“OMB”) issued a memorandum, Anti-Trafficking Risk Management Best Practices & Mitigation Considerations, to enhance the effectiveness of anti-trafficking requirements in federal acquisition. In response to that memorandum, three of the four agencies DHS, DOD, and State have taken initial steps to identify trafficking risks in their contract spending. However, USAID did not conduct the analysis that OMB recommended. Further, none of the four agencies have taken a systematic approach to managing trafficking risks in contracting, GAO found. Such an approach would include identifying and analyzing, developing responses to, and communicating the risks to contracting officials. This approach would better position agencies to support the U.S. policy of zero-tolerance for human trafficking, the GAO concluded.
Inconsistent Compliance with Anti-Trafficking Requirements
For the Report, GAO reviewed a nongeneralizable sample of 12 contracts awarded in fiscal years 2022 and 2023 by the four agencies. GAO reviewed the contract files for documentation related to federal and agency anti-trafficking requirements. GAO also reviewed relevant statutes, federal and agency regulations, guidance, and training, and interviewed OMB and agency officials.
All four agencies communicated federal anti-trafficking requirements to contracting officials through training and guidance, GAO found. Further, most contracting officials GAO spoke with had completed the training and were aware of how they should report trafficking violations. However, compliance with requirements was inconsistent. Specifically, GAO found that nine of the 12 contracts it reviewed did not meet one or more of the anti-trafficking requirements, such as obtaining a required anti-trafficking certification from contractors.
Although agencies require certain contractors to develop an anti-trafficking compliance plan, contracting officials are not required to request the plans, the GAO pointed out. Moreover, GAO found that four of the six plans provided by contractors did not meet all federal requirements for what must be included in a compliance plan. Reviewing implementation of, and compliance with, federal anti-trafficking requirements in contracts would help to assure agencies that contracting officials and contractors are fulfilling their responsibilities to prevent trafficking in federal contracts, GAO concluded.
In addition, GAO reported that suspension and debarment offices at all four agencies said they received no referrals of Inspector General-investigated trafficking allegations against recipients of contracts, grants, and cooperative agreements for fiscal years 2022 and 2023. The DOD Inspector General reported conducting investigations into trafficking allegations during this time. Contractors also reported taking actions against subcontractors that violated their anti-trafficking policies.
Nine Recommendations
The GAO made a total of nine recommendations, including two each to DHS, DOD, State, and USAID; and one to OMB. They are:
(1) The Secretary of Homeland Security should ensure that the Chief Procurement Official, in consultation with agency trafficking experts, establishes a timeline for and implements a systematic approach to managing trafficking risks in procurements. This approach should include:
- identifying and analyzing agency procurement-related trafficking risks for their level of trafficking risk,
- developing responses to address their highest risks, such as obtaining contractor anti-trafficking compliance plans and verifying contractor implementation of requirements, and
- communicating this information to contracting officials.
(2) The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment, in consultation with agency trafficking experts, prioritizes developing and implementing a systematic approach to managing trafficking risks in procurements. This approach should include:
- identifying the agency’s current trafficking risks and analyzing at-risk procurements for their level of risk,
- developing responses to address those risks, such as obtaining contractor anti-trafficking compliance plans and verifying contractor implementation of requirements, and
- communicating this information to contracting officials.
(3) The Secretary of State should ensure that the Deputy Assistant Secretary and Senior Procurement Executive, in consultation with agency trafficking experts, identifies a time frame to reevaluate whether the agency’s responses to contracting-related trafficking risks are working and if the agency needs to do a broader risk assessment.
(4) The Administrator of USAID should ensure that the Senior Procurement Executive, in consultation with agency trafficking experts, develops and implements a systematic approach to managing trafficking risks in procurements. This approach should include:
- identifying and analyzing procurements for their level of trafficking risk,
- developing responses to address those risks, such as obtaining contractor anti-trafficking compliance plans and verifying contractor implementation of requirements, and
- communicating this information to contracting officials.
(5) The Secretary of Homeland Security should ensure that the Chief Procurement Officer ensures components conduct reviews of a subset of contracts to determine whether contracting officials implemented federal anti-trafficking requirements, including incorporating the certification provision in covered solicitations and obtaining contractor anti-trafficking certifications prior to award and annually thereafter.
(6) The Secretary of Defense should ensure that the Under Secretary of Defense for Acquisition and Sustainment ensures components conduct reviews of a subset of contracts to determine whether contracting officials have implemented federal anti-trafficking requirements, including incorporating the certification provision in covered solicitations and obtaining contractor anti-trafficking certifications prior to award and annually thereafter.
(7) The Secretary of State should ensure that the Deputy Assistant Secretary and Senior Procurement Executive assess whether contracting officials obtained applicable annual contractor anti-trafficking certifications as part of the agency’s review of its awarded contracts.
(8) The Administrator of USAID should ensure that the Senior Procurement Executive reviews a subset of contracts to determine whether contracting officials have implemented federal anti-trafficking requirements, including incorporating the certification provision in covered solicitations and obtaining contractor anti-trafficking certifications prior to award and annually thereafter.
(9) The Director of OMB, in coordination with other agencies as appropriate, should clarify to agencies whether an entity’s annual Representations and Certifications in SAM.gov are sufficient to document contractor certifications related to combating trafficking in persons and determine whether there are any changes needed to SAM.gov.