Last Friday, an effort by some in Congress failed to cancel a potentially $10 billion Homeland Security contract that was granted to the company Accenture, which is incorporated in Bermuda.

This was the most recent battle in an ongoing war over whether multinational corporations should be given government contracts. On one side, Democrats such as Rep. Lloyd Doggett (D-Texas) have objected, declaring, “If they want a slice of the American pie, they had better help bake it.” This is the common rhetoric that hints at the patriotic duty to pay as much in taxes as possible. Obviously, how well this fits with the founding revolution of this country, which was based on paying too much in taxes is questionable.

In reality, Accenture does have offices in the United States (along with some 40 other countries) that pay taxes that help bake the American pie. In fact, it was reported in the Royal Gazette that the company employs roughly 100,000 U.S. citizens.

Furthermore, Accenture officials state that the contract will be implemented by its office in Virginia, which employs 25,000 people who pay taxes on income earned in the United States.

Not surprisingly, on the other side is Rep. Ron Davis (R-Va.) who has lead the defense of the contract. As stated by his spokesman, David Marin, “The award should go to the company best able to provide the goods or service at the best price to taxpayers.”

It is hard to argue with that, but one can wonder if Davis is supporting the contract for its merits or because it will go to those in his district.

Politics aside, an important question is should a corporation that uses a tax shelter in Bermuda be given a major government contract, especially one that deals with such a sensitive issue as national security?

The answer is absolutely yes.

The first reason why is the main argument against giving government taxes to Accenture is that its move to Bermuda has effectively robbed the treasury of tax revenue. But if you want to conserve tax revenue, then you should pick the most cost-effective bid.

To refuse a better bid by a company that is incorporated outside the United States would effectively waste tax revenue. Thus, the alternative many want would contradict their main argument against picking Accenture.

Second, many feel that not giving government contracts to companies that move out of the United States will act as a deterrent for others that are thinking of moving to Bermuda. In fact, not all the companies leaving depend on government contracts and the lure of reduced taxes has proven too much.

According to a company report, Stanley Works Ltd. will save around $30 million in U.S. taxes because of the its move to Bermuda. One of the major justifications for moving the corporate office to Bermuda was to help the company compete with other corporations that did not have to pay multiple taxes on their profits. What is the point of staying in the United States if you end up being bought out by a foreign competitor? And if they go out of business, they won’t pay any taxes.

Finally, the main problem becomes apparent. Companies incorporated in the United States have to pay taxes on profits made in foreign countries along with the foreign taxes. Surprisingly, this is unlike some of the more “enlightened” liberal European countries. This has led to an environment that has encouraged companies to move their headquarters out of the United States.

Now Congress wants to fix this problem by adding more laws to an already cluttered mess of tax code to impotently try more companies from leaving. Instead, Congress should try to understand why companies are trying to leave instead of concentrating on trying to trap companies here. They should try to create an environment that levels the playing field and encourages competition.

Want companies to stop leaving? Stop using subsidies to create an unbalanced playing field. Make a simple tax code that is easy to enforce and affects businesses evenly. Steve Forbes suggested his flat tax would bring in more income because more people would report their income and because businesses would have fewer reasons to leave.

A dialogue must be opened for serious tax reform, or more companies are going to go the way of those already in Bermuda.