With the amount of government spending on outsourced contractors growing from $235 billion in 2001 to over $435 billion in 2007, there is more opportunity than ever to defraud the government and taxpayers alike. So is it any surprise that Congress, in response to high-profile and widely publicized government contractor scandals, has heightened the ethics program criteria for corporations that do business with the federal government? Of course not.

Rather than tar all government contractors with a broad-tagging brush as “wasteful, deceitful and fraud-ridden,” the Ethisphere Institute decided to research the issue. Surely some government contractors care about ethics, and had implemented the controls, culture and programs to communicate such values and prevent unethical behavior.

In November 2007, the Ethisphere Institute’s Government Contractor Ethics Program Methodology Committee, comprised of the best and brightest experts in the ethics, legal and compliance fields, was unveiled. With their insight and input, an objective analysis was applied to over 1,000 federal government contractors. These companies comprise more than 90 percent of the outsourced government budget.

The weighted analysis effectively covers four broad-based categories: Code of Ethics and Business Conduct (20%); Leadership and Tone from the Top (20%); Internal Control Systems (35%); and Ethics Training and Communication Programs (25%). Information provided by the companies was supplemented by Ethisphere’s own research. In addition, Ethisphere conducted a random audit and verification of a number of responses, and encouraged companies to send in additional materials and “evidence” of their organization’s efforts in ethics and compliance.

Some companies chose to participate in the study, and others didn’t. For those that declined, we had to rely on the information that was available within the public domain. When all was said and done, Ethisphere gave each company a highly objective, numerical score.

The following pages break down the key findings of Ethisphere’s research. First, we list the 100 contractors that do the most business with the U.S. Government. Unfortunately, some of the private and overseas companies on that list who failed to respond, despite multiple efforts by the Ethisphere Institute to reach out to them, do not have a great deal of reliable, publicly available information regarding their ethics programs. As a result, these companies are listed as “NR,” or “not rated.” These companies will, however, be ranked in the future based upon Ethisphere analysts’ research and feedback from competitors, customers and suppliers, should NR companies continue to decline to participate.

We scored the remaining companies on a scale of 1 to 100 and compiled rankings based on these scores. The 35 contractors with the best ethics programs overall are highlighted, as well as the top 10 private company programs and the 5 most outstanding small company programs. These latter groups deserve particular credit and recognition—their efforts at creating and maintaining an ethical environment exceed many of the largest spenders of taxpayers’ money. Also featured are the five top-ranking foreign contractors. Lastly, we decided to call attention to the 10 contractors—big or small—that have the best codes of ethics and business conduct, the best internal controls systems and the best ethics training and communication programs, respectively.

What we found, not surprisingly, is that there is a big disparity between the calibers of ethics programs within these companies. And, although the reports of heavy abuse and scandal can be unforgettable, many contractors actually have very effective ethics and compliance programs in place. Take a look for yourself through the following pages and see which companies made the grade, and which companies fell flat on their face.

Rankings and Ratings:

• Top 100 Largest Government Contractors
• Best Ethics Programs Overall
• 10 Best Private Companies
• 5 Best Foreign Companies
• 5 Best Small Companies
• 10 Best Training and Communication Programs
• 10 Best Code of Ethics and Business Conduct
• 10 Best Internal Control Systems
• 10 Best Codes of Conduct