Should Non-U.S. Based Companies Be Eligible for Government Contracts?

Great Debates
1

Ahhhhh, irony: Accenture Ltd., which is headquartered in Bermuda, has won the $10 billion tender to create new immigration I.T. systems for the Dept. of Homeland Security. But now there is movement in Congress to award the contract elsewhere because Accenture’s corporate structure is arranged in such a way (perfectly legally, I might add) that they avoid payment of a large proportion of Federal taxes:

“House Panel Votes to Halt Accenture Pact” (*New York Times; * free registration required)

“The House Appropriations Committee voted on Wednesday to block a border-security contract worth up to $10 billion between the Homeland Security Department and Accenture because the company is based outside the United States. The Republican-controlled committee voted 35-16 in favor of a budget amendment that would prohibit contracts between the Homeland Security Department and corporations based abroad and prevent an overseas company already under a government contract from receiving additional ones.”

Accenture, in turn, has argued that they are the best-equipped bidder for the job, and that they employ 25,000 people in the U.S.

Was it reasonable to award the contract to a company that is based outside the U.S., but which employs 25,000 people in the U.S.? Is your opinion different than it might be otherwise because the contract deals with national security issues? And would it be fair to change the rules of the game after the award was made?

2

I find it repugnant that so many of our “corporate citizens” choose to avoid thier share of taxes by performing legal shenanigans with thier corporate headquarters. I distinctly remember Sen. Wellstone’s move to have the Senate act upon this, but it seems to have vanished into the fog. (You remember Wellstone, don’t you? How those disgusting Democrats tried to leverage mourning over his death to political advantage…)

I also remember criticism of his bill that was entirely valid. How do you go about defining what you want to make illegal. There isn’t any question that there are companies that are essentially “American” countries that are avoiding thier share of taxes by incorporating elsewhere. But there are, as well, truly foreign countries who seek nothing more than the opportunity to do fair business with the Gov. If you can’t define the behavior you intend to make illegal, you can’t help but write bad law, which is worse than no law at all.

Besides which, the current Admin’s devotion to protecting the business community from onerous burdens of regulation and the vexations of taxation probably render any such movement moot. Certainly Mr. Wellstone’s bill went nowhere in a big-ass hurry.