ICAR and Co-signers Submit Letter to President Obama on Public Procurement and Supply Chain Transparency

ICAR and Co-signers Submit Letter to President Obama Calling for Full Implementation of the Federal Funding Accountability and Transparency Act 2006     

Washington, D.C. (April 18, 2016) - The International Corporate Accountability Roundtable (ICAR) and ten other civil society organizations sent a letter to President Obama and the Office of Management and Budget (OMB) today, calling for the administration to fully implement the Federal Funding Accountability and Transparency Act of 2006 (FFATA).

Supply chain transparency is a key step in holding companies accountable for human rights violations throughout their operations. As the largest single purchaser in the global economy, the U.S. federal government has significant leverage over the businesses from which it procures goods and services. Using this leverage to require government contractors to publicly disclose information about the entities in their supply chains is in line with the United States’ duty to protect human rights, as laid out in the UN Guiding Principles on Business and Human Rights.

As such, ICAR and its co-signers applaud the congressional passage of the FFATA in 2006 (co-sponsored by Senators Tom Coburn, John McCain, Tom Carper, then Senator Obama, and others), yet are deeply concerned about current shortcomings in the full and intended implementation of the law. If implemented faithfully, the FFATA would require federal government contractors to disclose their supply chains. The FFATA applies to all federal contracts, excluding only contracts below $25,000 or contracts with companies with an income of less than $300,000. It requires OMB to operate a searchable public database that discloses the purpose of the contract and the address, including the country, where the work is performed for both contractors and their subcontractors.

Senate co-sponsors were explicit that the FFATA’s objective was to disclose all subcontracts. Moreover, the agencies implementing the FFATA acknowledged that the reporting requirement covers all subcontracts, irrespective of tier. Unfortunately, OMB has limited the reporting to exclude "supplier agreements with vendors, such as long term arrangements for materials or supplies that benefit multiple contracts.” In other words, OMB has excluded the part of supply chains that pose the greatest risk of human rights abuses.

The letter can be viewed here.

For additional information please contact Nicole Vander Meulen, ICAR's Legal and Policy Fellow, at nicole@icar.ngo.