Last year, we issued a web alert discussing how recipients of contracts supported by Recovery Act funds would be subject to comprehensive reporting requirements (click here to view last years alert). The first reporting period commenced on October 1, 2009 and, since then, it appears that a significant number of contractors failed to report as required.  As a result, President Obama issued a memorandum last week re-committing his Administration to "transparency in tracking recovery dollars and to elimination of waste, fraud, and abuse by recipients of hard-earned taxpayer dollars."  75 FR 67, April 8, 2010.  And in view of the lack of timely reporting, the President directed his Executive Departments to "intensify their efforts to improve reporting compliance of Recovery Act Funds, where authorized and appropriate, by terminating awards; pursuing measures such as suspension and debarment; reclaiming funds; and considering, initiating, and implementing punitive actions."

So, if you are a recipient of Recovery Act funds, please be sure to timely report in accordance with applicable rules and regulations, which can be found at FAR Subpart 4.15 and the contract clause at FAR 52.204-11. The President has specifically directed agencies to intensify efforts to timely report instances of noncompliance to the Office of Management and Budget, and has instructed the Director of the OMB to review the current guidance addressing noncompliance and strengthen it as necessary. Thus, there can be little doubt enforcement efforts will soon be intensifying with harsher penalties for violators of the rules.

We welcome your questions or comments, which can be sent to Jonathan DeMella at 206.623.3427 or email: demella@oles.com The Government Contracts Practice Group at Oles Morrison has an established history of assisting contractors with claims against federal and state agencies, bid protests and providing advice and counseling on all issues involving public procurement.