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Goya Could Lose More Than $1 Million In Federal Contracts

U.S. Government Bars Company From Selling To Island Military Bases


September 5, 2002
Copyright © 2002 CARIBBEAN BUSINESS. All Rights Reserved.

The U.S. Department of Labor (DOL) has excluded Goya de Puerto Rico Inc. from selling products to military posts in Cataño’s Ft. Buchanan and Ceiba’s Roosevelt Roads.

The order, which came from the DOL’s Office of Federal Contract Compliance Programs (OFCCP) Aug. 8, could cost Goya more than $1 million annually in goods sold to army bases. If the company’s prohibition is upheld, Goya will not be allowed to have or enter into government contracts for at least six months or until it submits an affirmative action program to the OFCCP that is declared acceptable.

The agency cited as grounds for the debarment Goya’s belief that as a minority enterprise, it does not have to present a formal affirmative action program or submit to periodic compliance reviews and inspections by the federal government.

"The OFCCP exercises its full enforcement authority, including the ultimate sanction of debarment, if a contractor refuses us access to do our job," stated OFFCCP Deputy Assistant Secretary Charles E. James Sr. "American workers deserve equal employment opportunity workplaces, and we intend to deliver that result."

According to a prepared statement sent by Goya President Frank Unanue on Aug. 8, the company has been selling products to the Armed Forces for the past 40 years. Established in Puerto Rico since 1963, it is the 10th largest local company according to the number of employees on the island and had estimated 2001 sales of $33.4 million (CARIBBEAN BUSINESS 2002 Book of Lists).

"We are in direct competition with companies in the Dominican Republic that sell to the Defense Commissary Agency and are not required to comply with the unnecessary record keeping, quotas, and the kind of government intervention demanded by the OFCCP," said Unanue in his statement to the DOL agency. "The additional costs that Goya would incur to comply with the OFCCP requirements would make our business uncompetitive.

"On the other hand," Unanue continued, "if we include these new costs in our product line, it would result in higher selling prices to the military community. This is definitely an outright injustice to those military servicemen who have to pay a higher price for our products while their income remains the same."

The OFCCP’s complaint goes back to June 1999, when it filed an administrative complaint against Goya for allegedly violating its obligations as a federal contractor. The complaint stated that the company had not developed and maintained a written affirmative action program as required by several federal regulations, including the Vietnam Era Veterans’ Readjustment Assistance Act of 1974, the Rehabilitation Act of 1973, and other affirmative action executive orders.

Goya claims it has never sold goods to the government under a Blanket Purchase Agreement (BPA). The government contends that as a product distributor to the armed forces, all sales in excess of $50,000 are automatically considered BPAs and must comply with federal regulations. Between 1993 and 2000, Goya’s sales to military bases in Puerto Rico averaged $1 million annually.

This Caribbean Business article appears courtesy of Casiano Communications.
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