6:48 PM EDT

Peter A. DeFazio, D-OR 4th

Mr. DEFAZIO. Mr. Chairman, I would hope the gentleman does not insist on his point of order, because the amendment that is before the House now, which I am offering, would provide for ``three strikes and you're out'' for defense contractors who are convicted of government procurement related fraud only. They can have other offenses of law against their employees, environmental laws, any other Federal law, but more than three government procurement-related fraud convictions would suspend

them from bidding on government contracts.

I have quite a list of firms here, which I am not going to read through in its entirety, obviously; but the list, from 1988 to 1999, of several hundred convictions consists of $1.125 billion in penalties on firms for both civil and criminal fraud in the area of procurement.

I believe that if we are talking about having the best most effective military we can have, the best weapon systems, the most cost-effective weapon systems, and having money adequate to provide training for our young men and women in uniform, we should do everything we can to squeeze fraud out of the system. Fraud is occurring, regularly occurring. Many would be shocked by the numbers and the names on this list, which is available through the Government Accounting Office.

If the gentleman's point of order prevails, I will have to offer another amendment on this subject which would provide for ``one strike and you're out,'' which is in order and would also be retroactive. My legislation which is before us now would be ``three strikes and you're out,'' and it is not retroactive. So these hundreds of prior convictions would be forgiven, but the message would be sent to these defense contractors that we will no longer allow them to freely commit fraud in procurement;

and if they do, the fourth time they do, they would be barred from further procurement for some period of time. The bill is not specific on the period of time for which they would be barred. There would be discretion available under existing law to the Secretary.

I cannot see how anybody could raise an argument against this. Yes, someone can make a point of order and reduce it down to one strike and make it retroactive, which would of course disbar most of our existing contractors, because many have one, two, three or more convictions for prior fraud; but I would hope that everybody here is concerned about fraud.

I believe this amendment could be crafted in a way that it would not be deleterious to our national defense. I would hope that the committee would accept the amendment and then perhaps rework it in a conference committee. I attempted to offer this amendment during the authorizing process, and I was precluded by the rule in offering a more sophisticated version of this amendment which would have dealt with a number of the questions that I am certain are going to be raised by members of the committee

here. I had hoped to be able to do that during the authorizing process. I was not allowed to offer that amendment by the Committee on Rules, though it was submitted on a timely basis to the Committee on Rules.

How can anybody defend continuing fraud? We have limited resources. Some of the fraud jeopardizes the safety of our troops; some of it goes to quality; some of it goes just to ripping off the Federal taxpayers. Either way, we cannot defend it; and we should bring an end to it. So I would suggest strongly that the gentleman withdraw his point of order, accept the amendment, and if they have some problems with some of the details, certainly those details could be provided for in conference with

the Senate.

POINT OF ORDER

6:49 PM EDT

Peter A. DeFazio, D-OR 4th

Mr. DeFAZIO. Mr. Chairman, reclaiming my time, I did not say that the gentleman had. What I said is that the gentleman prevailed on his point of order against the first one, so now I must offer one that goes to one strike, which I admit is very rigorous.

But the point I am making is what message are we sending to defense contractors who have committed fraud, and the list is long and it is ongoing, according to the Government Accounting Office, if we say to them we are not going to crack down on you; keep committing fraud, fraud that endangers the lives of young men and women in the military with substandard equipment, fraud that drains precious tax dollars from the training the gentleman from California so eloquently talked about earlier, fraud

that takes resources away from the American people, their tax dollars, and diverts it into the coffers that have not been earned by defense contractors? What message are we sending if we cannot crack down on fraud?

I cannot believe that Members would vote against such an amendment.

6:55 PM EDT

Peter A. DeFazio, D-OR 4th

Mr. DeFAZIO. Mr. Chairman, reclaiming my time, I did not say that the gentleman had. What I said is that the gentleman prevailed on his point of order against the first one, so now I must offer one that goes to one strike, which I admit is very rigorous.

But the point I am making is what message are we sending to defense contractors who have committed fraud, and the list is long and it is ongoing, according to the Government Accounting Office, if we say to them we are not going to crack down on you; keep committing fraud, fraud that endangers the lives of young men and women in the military with substandard equipment, fraud that drains precious tax dollars from the training the gentleman from California so eloquently talked about earlier, fraud

that takes resources away from the American people, their tax dollars, and diverts it into the coffers that have not been earned by defense contractors? What message are we sending if we cannot crack down on fraud?

I cannot believe that Members would vote against such an amendment.

6:55 PM EDT

Peter A. DeFazio, D-OR 4th

Mr. DeFAZIO. Mr. Chairman, reclaiming my time, I did not say that the gentleman had. What I said is that the gentleman prevailed on his point of order against the first one, so now I must offer one that goes to one strike, which I admit is very rigorous.

But the point I am making is what message are we sending to defense contractors who have committed fraud, and the list is long and it is ongoing, according to the Government Accounting Office, if we say to them we are not going to crack down on you; keep committing fraud, fraud that endangers the lives of young men and women in the military with substandard equipment, fraud that drains precious tax dollars from the training the gentleman from California so eloquently talked about earlier, fraud

that takes resources away from the American people, their tax dollars, and diverts it into the coffers that have not been earned by defense contractors? What message are we sending if we cannot crack down on fraud?

I cannot believe that Members would vote against such an amendment.

6:55 PM EDT

Peter A. DeFazio, D-OR 4th

Mr. DeFAZIO. Mr. Chairman, I had hoped to not be required to offer an amendment which would disbar contractors for committing criminal or civil fraud in procurement from the Federal taxpayers in doing business with the Pentagon, and do that with only one offense. I was willing to give them both the opportunity to amend their ways, that is to say, it would not be retroactive. And, secondly, that it would allow three strikes, the same thing allowed in many criminal cases against persons under Federal

law.

What message are we sending here tonight if the committee objects to this amendment? We have had extensive and emotional discussion about the lack of resources for our young men and women in uniform. What message are we sending to them saying the next time a contractor provides a piece of equipment that does not meet specifications and endangers their lives, their mission, that could strand them behind enemy lines.