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Obama directs federal agencies to compile contractor “Do Not Pay List”

President Obama directed federal agencies to set up a “Do Not Pay List” to prevent individuals and contractors from receiving improper government payments. Vice President Joe Biden, at a White House event, said the presidential memorandum would require agencies to review current pre-payment procedures and all available databases before releasing federal funds. “We are making sure we are not cutting checks to people who owe the federal government money themselves [and that] the IRS doesn’t give tax credits and send payments to people who try to defraud the government,” Biden said.

Erroneous payments by the federal government in 2009 totaled nearly $110 billion, noted OMB Director Peter Orszag. Orszag, in an OMB blog, said the “Do Not Pay List” will provide a single database source for agencies to use to make sure, among other payment errors, that they are not awarding projects to debarred or suspended federal contractors and providing benefits to individuals who are deceased, among other payment errors.

The  memorandum, entitled “Enhancing Payment Accuracy Through a `Do Not Pay’ List,” requires agencies to submit a plan to OMB within 90 days on its current pre-payment and pre-award procedures and a list of databases that are used. OMB must issue guidance within 180 days identifying best practices and databases to be used by the agencies to ensure only eligible recipients receive government benefits or payments.