Obama calls for more scrutiny of federal contractors

President Obama announced on Wednesday steps to block private contractors who have unpaid taxes from receiving federal contracts, arguing delinquent firms have cost government coffers as much as $5 billion.

He made the announcement prior to signing a presidential memorandum directing the Internal Revenue Service to review the certifications of nondelinquency that federal contractors are required to submit, with a report due in 90 days.

The memorandum also directs the Office of Management and Budget, the Treasury Department and other federal agencies to evaluate the practices of contracting officers and report within 90 days on potential improvements to ensure delinquent firms do not receive contracts.

Obama also called on Congress to approve legislation he co-sponsored as an Illinois senator with Sen. Claire McCaskill, D-Mo., to allow the IRS to share information about delinquent firms with agency contracting officers. House Oversight and Government Reform Chairman Edolphus Towns and Rep. Brad Ellsworth, D-Ind., have introduced the House version.

Obama also said he would include a provision in his fiscal 2011 budget request, similar to last year's budget, enabling the IRS to recoup unpaid taxes before a federal contract is issued.