Businesses, Pentagon agree this program doesn’t work — Congress saved it anyway

January 9, 2015 by

Over the past quarter century, the Defense Department has been testing a contracting program that was intended to help small businesses obtain a larger share of federal work. However, Pentagon officials and small business leaders say the initiative has not only failed to help small contractors, it’s actually hurt them.

In other words, neither those running the program nor those it was supposedly intended to help believe the program works. Thus, many expected the experiment to come to an end when its most recent congressional approval expires on Wednesday.

But that’s not happening.

In what critics are calling another victory for Washington’s massive contracting darlings at the expense of small businesses, Congress has approved legislation extending the contracting initiative, called the Comprehensive Subcontracting Plan Test Program (CSPTP), for another three years. It’s the eighth time the program has been revived.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/businesses-pentagon-agree-this-program-doesnt-work-congress-saved-it-anyway/2014/12/30/80d72aa0-9066-11e4-ba53-a477d66580ed_story.html

For government contractors, 2015 is in full swing

January 8, 2015 by

Contractors with their eyes on hot-button issues such as cybersecurity legislation, information technology (IT) acquisition reform, and strategic sourcing policy have plenty to consider in the 2015 National Defense Authorization Act (NDAA) and a recent policy memorandum issued by Office of Management and Budget (OMB) Administrator Anne Rung. Some key items to consider:

  • Cybersecurity: In 2015, the Department of Defense must issue rules requiring “operationally critical contractors” to report cyber incidents in their network and information systems.
  • IT Acquisition Reform: Under the Federal Information Technology Acquisition Reform Act (FITARA), Chief Information Officers in Federal agencies will take key roles in the acquisition process, which could affect the nature of IT-related acquisitions for years to come.  FITARA also sharpens the Government’s FOCUS on strategic sourcing.
  • Strategic Sourcing and Category Management: In an initiative that complements strategic sourcing, OMB has established “category management” as a key Federal acquisition strategy, which will foster Government-wide purchasing of items, such as IT hardware and software, by one source instead of through multiple agencies.

For a broad array of contractors, those “operationally critical contractors” working with the DoD, providers of IT-related supplies and services, and those supplying “categories” of supplies throughout the Federal government, these changes will affect their daily operations and how they market and sell to their Federal customers in 2015 and beyond.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=362362

Here’s how to decide whether a GSA Schedule is right for you

January 6, 2015 by

As a business person pursuing government contracts, you may have heard about the benefits of having a GSA Schedule.  But you may not know what a Schedule contract involves — or whether it’s worth your while to pursue one.  This article presents you with the facts about a GSA Schedule, how to qualify, and the decisions you need to make.

 

Consider the Facts

Here are some facts to help make an informed decision.

First of all, “GSA” stands for the General Services Administration, a federal agency which awards, each year, about $50 billion in blanket contracts (known as “Schedules”) to hundreds of companies.  Eighty percent (80%) of Schedule contractors are small businesses who are successful at winning 36% of those sales.

The process to win a GSA Schedule contract begins with your preparation of a proposal.  This is a demanding task that can take several months to prepare.  Many businesses choose to hire a consultant to prepare their proposal, even though proposal preparation is actually something that just about anyone can do — if you are willing and able to follow detailed proposal preparation instructions.

Qualifying for a Schedule

Not every business qualifies for a GSA Schedule, so before preparing a proposal, you first should determine your eligibility. Here are the major requirements:

  • Your company must have at least two years’ experience in successful sale of the products and/or services you offer.
  • Your company and its corporate officers must have a satisfactory record of integrity and business ethics.
  • You must make sure all your NAICS codes are accurate and reflect the type of services that you plan to offer on your GSA Schedule.
  • Your registration in the System for Award Management (SAM) must be active and up-to-date.
  • You must be willing to obtain a “digital certificate” (at a cost of about $119) so that GSA can authenticate your electronic signature and allow you to upload and access your proposal documents.
  • Your company must have adequate financial resources to perform a federal contract, or you must have the ability to obtain them.
Your Options

If you meet the requirements listed above, then it’s appropriate to chart a course of action.  Here are some things to consider:

  • If you decide to hire a consultant to help you navigate the proposal process, please proceed with caution.  You should be aware of the fact that no consultant can do 100 percent of the work for you.  In fact, it’s desirable that someone from your company actively participates in the GSA Schedule proposal process.  Your company representative will need to compile a lot of information to be included in the proposal and also needs to carve-out enough time to learn the process, develop a relationship with GSA’s contracting officials, and make strategic decisions about how and to which government agencies the eventual contract will be marketed.  A consultant can play a valuable role but, before hiring one, make sure you investigate their experience, ask about their track-record, and have a clear understanding of exactly what they will do for you and at what price.
  • Attending a GSA training session can help you better understand the GSA Schedule process.  The Georgia Tech Procurement Assistance Center (GTPAC) regularly offers a free webinar entitled “Understanding the GSA Schedule Process.”  Visit GTPAC’s training calendar at http://gtpac.ecenterdirect.com/Conferences.action to register for the next session.  GTPAC also has compiled a group of resources for companies seeking help with the Schedule process.  You can find these resources at: http://gtpac.org/gsa-schedule-resources.

Feel free to discuss your GSA Schedule needs and options with any GTPAC Counselor.  You can find our contact information at: http://gtpac.org/team-directory.

 

SBA announces new HUBZone designations effective Jan. 1, 2015

January 5, 2015 by

The Small Business Administration (SBA) has announced changes to the geographic HUBZone designations, effective January 1, 2015.

The SBA says the changes reflect several new data sources. These data sources include:

  • American Community Survey 2009-2013 five year estimates,
  • 2013 OMB metropolitan area delineations, and
  • 2015 lists of Difficult Development Areas and Qualified Census Tracts, released by HUD in October 2014.

The changes reflect:

  • eight newly qualified counties,
  • 47 counties that have been re-designated until January 2018,
  • 1,479 newly qualified census tracts, and
  • 1,319 census tracts that have been re-designated until January 2018.

All current HUBZone designated areas can be found by downloading this document: HUBZone Designations – effective 01.01.2015

Please note that these new changes have not been incorporated into SBA’s interactive HUBZone map yet.  SBA says it will make another announcement about revisions to the map when it is updated.

For more information about the HUBZone program, please see: https://www.sba.gov/content/understanding-hubzone-program

Here are the Georgia companies who won federal contracts in 2014

January 2, 2015 by

Ever wonder who’s winning federal contracts in Georgia?

Wouldn’t this information be helpful if you are looking for subcontracting prospects?  Or when you’re trying to figure out who your competitors are?  Or when considering who might be a good partner on an upcoming bid proposal?

Federal Contract Award Winners in GeorgiaEach month, the Georgia Tech Procurement Assistance Center (GTPAC) compiles and publishes a list of federal contracts awarded to Georgia businesses.  The list comes complete with point-of-contact information on the awardees, the name of the awarding agency, the dollar value of the contract, and much more.

Download details on the award winners for December 2014 right here: FEDERAL CONTRACT AWARDS IN GEORGIA – DEC. 2014

A month-by-month breakdown of winners of federal contracts throughout 2014 may be found at the links below:

For information on Georgia businesses who won federal contracts in 2013, click here.

Lax oversight allows women-only contracts to go to men

December 31, 2014 by

Jennifer Dickerson spent more than 40 hours of work over three months to get her Orlando environmental consulting company certified as a women-owned business, a designation that would help her win federal contracts intended to go to disadvantaged businesses. She and her assistant assembled legal documents and tax records, responded to multiple questions, and paid a $275 processing fee to a third-party agency to prove that her small company is majority woman-owned and operated.

“It was important to me to make sure I adhered to all the requirements” of the federal program established in 2000 to set aside a percentage of government contracts for women-owned small businesses, Dickerson says.

Not every business owner shares Dickerson’s sense of responsibility. A recent report critical of the U.S. Small Business Administration’s program revealed that more than 40 percent of companies that got government contracts as women-owned businesses in the last two years were not actually eligible.

Keep reading this article at: http://www.businessweek.com/articles/2014-11-20/lax-oversight-lets-men-pose-as-women-to-win-government-contracts

Construction company to pay $2.15 million, admits abuse of DC’s certified business enterprise program

December 30, 2014 by

Forrester Construction Company has agreed to pay $2.15 million to the United States and implement internal reforms to resolve a criminal investigation into alleged fraud committed by the company in connection with the use of Certified Business Enterprises (CBEs) in the procurement of more than $145 million in District of Columbia government contracts. The internal reforms will be subject to independent review and reporting.

As part of the resolution, Forrester Construction admitted that it improperly entered into written letter agreements and “Action of Management Committee” memoranda with the CBE participants to joint ventures that were not disclosed to the District of Columbia during the contract procurement process. As a result, the company admitted, both Forrester Construction and the CBE partners failed to follow the required CBE rules and regulations.

The announcement concludes a two-year investigation into Forrester Construction, a firm based in Rockville, Md., as well as its CBE partners on the joint venture projects.

Under the terms of a non-prosecution agreement reached with the U.S. Attorney’s Office for the District of Columbia, Forrester Construction agreed to pay $2.15 million to the United States and accepted and acknowledged responsibility for its improper conduct, as described in a Statement of Facts. The company also agreed to undertake various remedial measures to ensure compliance with the requirements of the District of Columbia’s CBE program (or any such equivalent on federal government projects) and the U.S. Small Business Administration’s 8(a) program, insofar as the company undertakes projects involving CBEs or 8(a) companies in the future.

Both the District of Columbia’s CBE program and SBA’s 8(a) program are meant to help small, disadvantaged businesses access government procurement markets.

The remedial measures include the hiring or designation of a CBE and 8(a) Compliance Officer, as well as an Ethics Officer; the implementation of a comprehensive training program for all company personnel regarding compliance with the CBE and 8(a) programs; maintaining an effective compliance and ethics program, and continuing cooperation with law enforcement. Significantly, individual employees directly associated with the inappropriate conduct are no longer employed by the company.

Additionally, the company agreed to undertake community service intended to develop improvements in the CBE and 8(a) programs going forward. Forrester Construction agreed to offer workshops, either individually or in collaboration with an industry trade association, aimed at providing training with respect to the rules and regulations of the CBE and 8(a) programs, among other topics relating to the construction industry.

This case is the latest example of law enforcement efforts to protect the integrity of CBE programs. Michael A. Brown, a former member of the Council of the District of Columbia, pled guilty in 2013 to a federal bribery charge stemming from an undercover investigation in which he accepted $55,000 from FBI agents posing as employees of a company that purportedly wanted CBE approval and contracting opportunities. Brown is serving a 39-month prison term.

“By changing the terms of joint ventures with small disadvantaged businesses and not reporting them to the D.C. government, Forrester Construction circumvented the foundation of the CBE program and used their proceeds to increase their own bottom line,” said Assistant Director in Charge McCabe.

“These joint ventures principally served the interests of Forrester Construction Company to make money and to obtain contracting opportunities otherwise unavailable to them,” said SBA Inspector General Gustafson. “Joint ventures involving SBA program participants should be structured and executed to give the small business an opportunity to gain experience and technical knowledge and to further develop their business. I want to thank the U.S. Attorney’s Office for its leadership in reaching this agreement.”

According to the Statement of Facts agreed to by the company, between 2008 and 2009, Forrester Construction formed multiple joint ventures with CBEs for the purpose of bidding on construction contracts in the District of Columbia.

Three joint ventures formed by Forrester Construction and one of the CBEs, EEC of D.C., Inc., were awarded construction contracts from the District of Columbia. These contracts, including change order amounts, totaled approximately $64 million for construction of a new headquarters building for the Department of Employment Services; approximately $5.4 million for construction of a Senior Wellness Center in Ward 1, and approximately $56 million for the renovation and modernization of the existing Anacostia Senior High School building.

Forrester Construction also formed joint ventures with another CBE, and those joint ventures were also awarded construction contracts from the District of Columbia, which were, over a period of approximately three years, in an aggregated amount in excess of $20 million.

In each of these various projects, the joint venture formed by Forrester Construction and the respective CBE partner received the maximum amount of contracting preferences for which the CBE partner was eligible, which provided Forrester Construction and the respective CBE partner with a competitive advantage during the bidding process.

As part of its joint venture submissions to the District of Columbia Department of Small and Local Business Development (DSLBD), Forrester Construction and its respective CBE partner represented that the CBE partner would be the majority partner and maintain a 51% interest in the joint venture, entitling the CBE partner to 51% of the net operating profits of the joint venture. Each joint venture agreement also established a “Management Committee,” consisting of two representatives from the CBE partner and one representative from Forrester Construction, which provided the CBE partner with majority control of the joint venture.

After each joint venture for the projects was submitted to, and certified by, the DSLBD, however, Forrester Construction and the respective CBE partner signed a memorandum entitled “Action of Management Committee” or signed a letter agreement, which related to the operations of each joint venture. The memoranda and/or letter agreements effectively increased Forrester Construction’s control over the day-to-day operations of the projects and reduced the CBE partner’s share of the profits or losses in the projects—notwithstanding the requirements of the joint venture agreements and the CBE rules and regulations. Forrester Construction and the CBE partner did not disclose these “Action of Management Committee” memoranda or the letter agreements to the District of Columbia government during the procurement process.

The “Action of Management Committee” memoranda also revised the respective scope of work and services that Forrester Construction and the CBE partner would provide to certain of the projects. In each instance, the “Action of Management Committee” memorandum applicable to the particular project identified a small scope of work for the CBE partner to complete and provided that Forrester Construction would provide all remaining general conditions, subcontract work, and all other work required to fulfill the requirements of the project.

For example, with respect to the Anacostia Senior High School joint venture, the applicable “Action of Management Committee” memorandum provided that the scope of work for the CBE equated to approximately $2.75 million, while the scope of work for Forrester Construction equated to approximately $46 million. The “Action of Management Committee” memoranda also established a pre-determined profit for the joint venture that specifically excluded any profits earned or losses sustained by either Forrester Construction or the CBE partner for their respective scope of work. Moreover, Forrester Construction and the CBE partner agreed that only the pre-determined profit, exclusive of each partner’s individual “scope of work,” would be split in the proportions agreed to in the joint venture agreement (i.e., 51% for the CBE partner and 49% for Forrester Construction). All other profits or losses generated through an individual scope of work would belong to the respective entity.

All of the work was performed under the various contracts. However, as a result of the letter agreements and “Action of Management Committee” memoranda, the CBE participant for each of the projects did not maintain majority control of the projects and did not receive 51% of the profits or losses associated with the projects, as required by the joint venture agreements and in accordance with the CBE rules and regulations.

This investigation was conducted by the FBI’s Washington Field Office; the Criminal Investigation Unit of the U.S. Attorney’s Office for the District of Columbia; the District of Columbia’s Office of the Inspector General, and the SBA Office of Inspector General.

Source: http://www.fbi.gov/washingtondc/press-releases/2014/forrester-construction-company-agrees-to-pay-2.15-million-admits-abuse-of-certified-business-enterprise-program

Faulty joint venture results in disqualifying affiliation

December 29, 2014 by

An 8(a) program protege was deemed affiliated with its mentor–and ineligible for a small business set-aside contract–because the joint venture agreement between the mentor and protege failed to comply with certain mandatory 8(a) joint venture requirements.

In a recent decision, the SBA Office of Hearings and Appeals concluded that an 8(a) mentor-protege joint venture was not entitled to take advantage of the special exception from affiliation because of the flaws in its joint venture agreement.  OHA’s decision is an important reminder to 8(a) mentors and proteges of the critical importance of strictly complying with the 8(a) joint venture regulation.

OHA’s decision in Kisan-Pike, A Joint Venture, SBA No. SIZ-5618 (2014) involved an Army Corps of Engineers solicitation for the design and construction of an Army Reserve Center.  The solicitation was issued as a small business set-aside.

Kisan-Pike, A Joint Venture, submitted a proposal.  Kisan-Pike was a joint venture between Kisan Engineering Company, P.C., an 8(a) program participant, and its large business mentor, The Pike Company, Inc.  Kisan and Pike had an active, approved 8(a) mentor-protege agreement at the time that Kisan-Pike submitted its proposal.  Kisan-Pike self certified as a small business based on the special exception from affiliation available to 8(a) mentor-protege joint ventures.

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/8a-mentor-protege-jvs-faulty-jv-agreement-results-in-affiliation

American Express to hold ‘government contracting success’ forum in Atlanta on Jan. 21st

December 24, 2014 by

American Express OPEN is holding its latest is a series of national forums on government contracting on Wednesday, Jan. 21, 2015 at the Marriott Marquis in downtown Atlanta.

The AMEX forums are designed to help businesses build connections with government officials, contracting experts, and other businesses to assist in winning government contracts.

For further information and to register, visit: https://www.americanexpress.com/us/small-business/openforum/events/gcatlanta/

 

U.S. files suit against firm for allegedly submitting false claims under HUBZone program

December 24, 2014 by

The United States has filed a complaint against Orlando, Florida, based Air Ideal Inc. and its owner, Kim Amkraut, for allegedly making false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company.

Under the federal HUBZone program, companies that maintain their principal office in a designated HUBZone and meet certain other requirements can apply to the SBA for certification as a HUBZone small business company.  HUBZone companies can then use this certification when bidding on government contracts.  In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

Justice Dept. sealThe complaint alleges that Air Ideal and Kim Amkraut originally applied to the HUBZone program in 2010 by claiming that Air Ideal’s principal office was located in a designated HUBZone.  The complaint further alleges that, in fact, this location was a “virtual office” where no Air Ideal employees worked and Air Ideal was actually located in a non-HUBZone location.  Allegedly, the defendants not only misrepresented the location of Air Ideal’s principal office to the SBA, but also submitted to the SBA a fabricated lease agreement for its purported HUBZone office.

The complaint alleges that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers and the U.S. Department of Interior that were worth millions of dollars.  Each of those contracts had been set aside for qualified HUBZone companies.  The complaint asserts claims against Air Ideal and Kim Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

The United States filed its complaint in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it has done here.

The case is U.S. ex rel. Hopson v. Air Ideal, Inc. and Kim Amkraut, No. 6:13-cv-775-Orl-37GJK (M.D. Fla.).

The claims asserted against Air Ideal and Kim Amkraut are allegations only, and there has been no determination of liability.

Source: http://www.justice.gov/opa/pr/united-states-files-suit-against-air-ideal-and-its-owner-allegedly-submitting-false-claims