By: Edward T. DeLisle

On Wednesday, January 20, 2010, President Obama signed a presidential memorandum directing the Internal Revenue Service to conduct an audit of all federal contractors.  As reported by, the audit is designed to identify those federal contractors that have failed to pay taxes and prevent them from obtaining additional federal work.  The IRS is required to issue a report on its findings within ninety (90) days.

Calling out “deadbeat companies” that are being awarded government contracts while delinquent in their taxes, President Obama’s memorandum is intended to stop these companies from collecting government contracts while they are “gaming the system.”  Studies by the Government Accountability Office have identified tens of thousands of such companies that, collectively, owe more than $5 billion in back taxes, the president said.

Edward T. DeLisle is a Partner in the firm and a member of the Federal Contracting Practice Group.