September 22, 2021

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Human Trafficking: Oversight of Contractors’ Use of Foreign Workers in High-Risk Environments Needs to Be Strengthened

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<div>What GAO Found Current policies and guidance governing the payment of recruitment fees by foreign workers on certain U.S. government contracts do not provide clear instructions to agencies or contractors regarding the components or amounts of permissible fees related to recruitment. GAO found that some foreign workers—individuals who are not citizens of the United States or the host country—had reported paying for their jobs. Such recruitment fees can lead to various abuses related to trafficking in persons (TIP), such as debt bondage. For example, on the contract employing the largest number of foreign workers in its sample, GAO found that more than 1,900 foreign workers reported paying fees for their jobs, including to recruitment agencies used by a subcontractor. According to the subcontractor, these fees were likely paid to a recruiter who assisted foreign workers with transportation to and housing in Dubai before they were hired to work on the contract in Afghanistan (see figure). Some Department of Defense (DOD) contracting officials GAO interviewed said that such fees may be reasonable. DOD, the Department of State (State), and the U.S. Agency for International Development (USAID) have developed policy and guidance for certain contracts addressing recruitment fees in different ways. However, these agencies do not specify what components or amounts of recruitment fees are considered permissible, limiting the ability of contracting officers and contractors to implement agency policy and guidance. Sample Recruitment Paths for Foreign Workers on a U.S. Government Contract in Afghanistan GAO found that agency monitoring, called for by federal acquisition regulations and agency guidance, did not always include processes to specifically monitor contractor efforts to combat TIP. For 7 of the 11 contracts in GAO's sample, DOD and State had specific monitoring processes to combat TIP. On the 4 remaining contracts, agencies did not specifically monitor for TIP, but rather focused on contractor-provided goods and services, such as building construction. In addition, some DOD and State contracting officials said they were unaware of relevant acquisitions policy and guidance for combating TIP and did not clearly understand their monitoring responsibilities. Both DOD and State have developed additional training to help make contracting officials more aware of their monitoring responsibilities to combat TIP. Without specific efforts to monitor for TIP, agencies' ability to implement the zero tolerance policy and detect concerns about TIP is limited. Why GAO Did This Study Since the 1990s, there have been allegations of abuse of foreign workers on U.S. government contracts overseas, including allegations of TIP. In 2002, the United States adopted a zero tolerance policy on TIP regarding U.S. government employees and contractors abroad and began requiring the inclusion of this policy in all contracts in 2007. Such policy is important because the government relies on contractors that employ foreign workers in countries where, according to State, they may be vulnerable to abuse. GAO was mandated to report on the use of foreign workers. This report examines (1) policies and guidance governing the recruitment of foreign workers and the fees these workers may pay to secure work on U.S. government contracts overseas and (2) agencies' monitoring of contractor efforts to combat TIP. GAO reviewed a nongeneralizable sample of 11 contracts awarded by DOD, State, and USAID, composing nearly one-third of all reported foreign workers on contracts awarded by these agencies at the end of fiscal year 2013. GAO interviewed agency officials and contractors about labor practices and oversight activities on these contracts.</div>
Department of Defense To help ensure agencies can more fully implement their monitoring policy and guidance related to recruitment of foreign workers, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each develop, as part of their agency policy and guidance, a more precise definition of recruitment fees, including permissible components and amounts.

Closed – Implemented

In comments on a draft of the report, the Department of Defense (DOD) concurred with this recommendation and indicated that it would define recruitment fees as part of the next review of DOD policy on combating trafficking in persons. The Senior Policy Operating Group for Combating Trafficking in Persons (established under the President’s Interagency Task Force for Monitoring and Combatting Trafficking in Persons) agreed with GAO’s conclusion and requested that the Federal Acquisition Regulatory Council (FAR Council) consider developing a definition for the term ”recruitment fees” to create consistency and certainty for contracting parties. In response, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council agreed to a rule defining “recruitment fees” as fees of any type, including charges, costs, assessments, or other financial obligations, that are associated with the recruiting process, regardless of the time, manner, or location of imposition or collection of the fee. The rule further elaborates on what is included in this definition. The final rule was published in the Federal Register, Vol. 83, No. 244, on December 20, 2018.

Department of State To help ensure agencies can more fully implement their monitoring policy and guidance related to recruitment of foreign workers, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each develop, as part of their agency policy and guidance, a more precise definition of recruitment fees, including permissible components and amounts.

Closed – Implemented

In response to GAO’s recommendation, State issued revised procurement guidance on combating TIP in April 2015 that requires proposals for certain contracts to include a recruitment plan that states that the recruited employee will not be charged recruitment fees. This guidance defines recruitment fees to include, but not be limited to, the following fees, charges, or costs: (1) for soliciting, identifying, considering, interviewing, referring, retaining, transferring, selecting, or placing potential employees; (2) for covering the cost, in whole or in part, of advertising; (3) for certifying labor applications; (4) for processing petitions; (5) for visas and any fee that facilitates an employee obtaining a visa such as appointment and application fees; (6) for government-mandated costs such as border crossing fees; (7) for procuring photographs and identity documentation, including any nongovernmental passport fees; (8) fees charged as a condition of access to the job opportunity, including procuring medical examinations and immunizations and obtaining background, reference and security clearance checks and examinations; and (9) for an employer’s recruiters, agents or attorneys. The guidance states further that recruitment fees included by the prime contractor in the contract price must be allowable by country law, allocable to the contract based on benefit to the program, and reasonable based on what a prudent businessperson would pay for similar expenses and charges.

United States Agency for International Development To help ensure agencies can more fully implement their monitoring policy and guidance related to recruitment of foreign workers, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each develop, as part of their agency policy and guidance, a more precise definition of recruitment fees, including permissible components and amounts.

Closed – Implemented

In commenting on a draft of this report, the U.S. Agency for International Development (USAID) noted that a proposed amendment to the Federal Acquisition Regulation (FAR) on combating Trafficking in Persons (TIP) contained language that would prohibit charging contractor employees any recruitment fees. The Senior Policy Operating Group for Combating Trafficking in Persons (established under the President’s Interagency Task Force for Monitoring and Combatting Trafficking in Persons) agreed with GAO’s conclusion and requested that the Federal Acquisition Regulatory Council (FAR Council) consider developing a definition for the term ”recruitment fees” to create consistency and certainty for contracting parties. In response, the Civilian Agency Acquisition Council and the Defense Acquisition Regulations Council agreed to a rule defining “recruitment fees” as fees of any type, including charges, costs, assessments, or other financial obligations, that are associated with the recruiting process, regardless of the time, manner, or location of imposition or collection of the fee. The rule further elaborates on what is included in this definition. The final rule was published in the Federal Register, Vol. 83, No. 244, on December 20, 2018.

Department of Defense To help improve agencies’ abilities to detect potential TIP abuses and implement the U.S. government’s zero tolerance policy, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each take actions to better ensure that contracting officials specifically include TIP in monitoring plans and processes, especially in areas where the risk of trafficking is high. Such actions could include developing a process for auditing efforts to combat TIP or ensuring that officials responsible for contract monitoring are aware of all relevant acquisition policy and guidance on combating TIP.

Closed – Implemented

DOD concurred with this recommendation, indicating that it would update the Defense Federal Acquisition Regulation Supplement (DFARS) accordingly once the final Federal Acquisition Regulation on Ending Trafficking in Persons had been published. DOD subsequently updated the DFARS in 2015 to include a sample checklist for auditing compliance with Combating Trafficking in Persons (CTIP) policy. This checklist reiterates the U.S. government’s zero tolerance policy regarding trafficking in persons and includes, among other items, questions regarding contractors’ treatment of employee passports and other identification documents. Also in fiscal year 2015, DOD developed and mandated acquisition training for DOD military and civilian contracting employees. Among other things, this training specifies the responsibilities of DOD acquisition professionals in preventing and responding to human trafficking violations. U.S. Central Command has also created a CTIP Program Manager position in Afghanistan, which ensures that CTIP training is provided to contracting officials in that country.

Department of State To help improve agencies’ abilities to detect potential TIP abuses and implement the U.S. government’s zero tolerance policy, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each take actions to better ensure that contracting officials specifically include TIP in monitoring plans and processes, especially in areas where the risk of trafficking is high. Such actions could include developing a process for auditing efforts to combat TIP or ensuring that officials responsible for contract monitoring are aware of all relevant acquisition policy and guidance on combating TIP.

Closed – Implemented

State concurred with this recommendation, noting that it would add a requirement to the process that contracting officer’s representatives (COR) use to certify that they are familiar with requirements for TIP monitoring and include verification of TIP monitoring in reviews of contracting operations. In response to GAO’s recommendation, State issued new guidance on combatting TIP in April 2015 that included an attachment outlining CORs’ responsibilities for monitoring TIP. This attachment listed several actions CORs will take to minimize the risk of TIP on their contract during the pre-solicitation, pre-proposal, post-award, and monitoring phases. It also instructed CORs monitoring contracts in areas where the risk of trafficking is high to be especially vigilant in developing a monitoring plan. Finally, the guidance provided a method for CORs to document contract monitoring efforts and included sample interview questions to elicit information from contractor employees.

United States Agency for International Development To help improve agencies’ abilities to detect potential TIP abuses and implement the U.S. government’s zero tolerance policy, the Secretaries of Defense and State and the Administrator of the U.S. Agency for International Development should each take actions to better ensure that contracting officials specifically include TIP in monitoring plans and processes, especially in areas where the risk of trafficking is high. Such actions could include developing a process for auditing efforts to combat TIP or ensuring that officials responsible for contract monitoring are aware of all relevant acquisition policy and guidance on combating TIP.

Closed – Implemented

USAID concurred with this recommendation, noting that it was in the process of developing combating TIP training for contracting officials with a special focus on monitoring awards for TIP compliance. In October 2016, USAID mandated the completion of on-line training intended to increase the agency’s acquisition workforce’s awareness of the steps necessary to comply with and enforce policies that aim to protect vulnerable individuals and discourage its contractors’ and subcontractors’ employees from engaging in TIP activities.

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