Camnetics Manufacturing's Checkered Career

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"In the suspension and debarment process, those with money who hire effective representation make it hard to apply long terms or in any way deviate from the exact language of the regulation," says Lussier in an e-mail. "It's not exactly buying your way out of trouble, but it's about as close as you can get to it."

One reason past offenders continue to supply the Pentagon is the lack of a central means to track military suppliers. The General Services Administration maintains an online database to keep tabs on banned contractors. But the Pentagon, individual military services, and other government agencies all operate separate databases for excluding wayward suppliers. What's more, government rules generally limit debarment to three years. Lussier says longer bans can be imposed but they require "aggravating circumstances" such as the violator having destroyed evidence. When contractors' deals are suspended during court proceedings, that often counts as part of the three-year penalty. Once-banned contractors can easily slip back into the system, says Lussier. "What a mess," he says.

Tracking Contractor Misconduct

Watchdog groups have created their own databases to track government suppliers. In 2007, the Project on Government Oversight (POGO) a nonprofit in Washington, launched a Web site called www.contractormisconduct.org, which keeps record of the largest contractors cited for misconduct. "The government really isn't looking at who they're doing business with," says Danielle Brian, executive director of POGO.

Congress is beginning to take action. A new bill approved by the House in April calls for a centralized database of government suppliers. It would include a description of actions taken against government contractors, provide criminal and debarment histories, and track when companies have failed to complete contracts on time or exceed cost estimates. "Each procurement officer is operating on their own," says Representative Carolyn Maloney (D-N.Y.), who introduced the bill. "We're in the 21st century now; there's really no reason why we can't have a centralized database where procurement officers could check on the track record of contractors."

Burnsed is an editorial assistant in BusinessWeek's Atlanta bureau. Grow is a senior writer for BusinessWeek's special projects team based in Atlanta.

Burnsed is an editorial assistant for BusinessWeek based in Atlanta. Grow is a correspondent in BusinessWeek's Atlanta bureau .