April 21, 2014 by cs
U.S. attorneys, the FBI, labor and transportation officials announced on April 7, 2014 that Connecticut-based construction company Manafort Brothers, Inc. will pay $2.4 million and implement internal reforms subject to independent monitoring to resolve a multi-agency joint criminal and civil investigation into alleged fraud committed by the company in connection with a public works project that commenced in 2007.
As part of the resolution, Manafort admitted that it made false statements to the United States and the State of Connecticut Department of Transportation that disadvantaged business enterprises (DBE) performed subcontracted work on the federally and state funded relocation of Route 72 when, in fact, non-DBE performed the work.
Manafort submitted a bid to ConnDOT to serve as the general contractor on a federally and state funded road project. All qualifying bids were required to designate a percentage of work that would be performed by DBE, a requirement designed to provide socially and economically disadvantaged contractors, who have faced historical barriers to entry in the construction industry, with fair opportunities to compete for federally funded work.
The State of Connecticut Department of Transportation (ConnDOT) determined that Manafort was the apparent low bidder for the project with bid of approximately $39,663,000. According to the pre-award bid documents, Manafort represented to ConnDOT that a particular DBE, identified as “Company #1,” would perform work under the contract totaling approximately $3,064,372, or 70 percent of the overall DBE goal. In its pre-award submission package, Manafort stated that Company #1 would furnish all supervision, labor and materials in respect to the work covered by the subcontract agreement. This work involved being responsible for the project’s reinforcing steel, materials for structural steel, furnishing a pedestrian bridge that would span the new roadway and the majority of work for a large retaining wall adjacent to the new highway.
The contract for the project was officially awarded to Manafort in August 2007 based, in part, on its representations that Company #1 would perform the work described in Manafort’s pre-award submission. However, during the course of the project, it was determined Company #1 was not performing most of the work that Manafort claimed it was performing. In fact, the investigation revealed that Manafort was utilizing Company #1 essentially as a pass-through entity. That is, Manafort would negotiate with and supervise subcontractors that it procured to perform work that Company #1 was supposed to perform or procure and supervise. The Government maintains that Manafort arranged to pay those contractors through Company #1 to skirt DBE regulations.
Under the terms of a non-prosecution agreement and civil settlement agreement with the government, Manafort represented that it has undertaken various remedial measures to ensure compliance with the DBE programs for its current and future federally funded construction projects. These measures include establishing a position for an Ethics and Compliance Officer at Manafort, forming a DBE compliance committee that meets regularly to review and address DBE-related issues, mandating DBE compliance training for Manafort employees, deploying software to insure that DBE are qualified to perform the work that they bid, removing the Manafort personnel directly involved in the misconduct, and continuing to assist law enforcement in its investigation. Manafort has also agreed to pay a civil fine of $2,460,722.02.
Manafort sought an unfair and illegal advantage over its competitors and deprived disadvantaged businesses of an opportunity to perform work on this taxpayer funded construction project. The non-prosecution agreement announced by the U.S. Attorney’s office in Connecticut addresses only the corporate criminal liability of Manafort, not potential criminal charges for any individual.
More details available at: http://www.justice.gov/usao/ct/Press2014/20140407-1.html.
April 18, 2014 by cs
President Obama’s mandate that federal contractors must let their employees discuss compensation might be minor for most businesses, but the heavy lifting is yet to come.
By itself, the order has a “pretty small impact” on most businesses, said Alan Chvotkin, executive vice president of contractors’ trade group Professional Services Council — especially since it simply prohibits contractors from retaliating against discussions about pay, but doesn’t yet require them to report compensation data.
“Very, very few companies have an affirmative policy that prohibits conversation about pay,” he said, noting that smaller companies are more likely to feel the effects of the order “because of the often close working environment of their employees, whereas larger companies have a larger and often more distributed workforce, even if located in the same building or complex.”
In an attempt to discourage pay discrimination, Obama last week signed an executive order requiring federal contractors to allow employees to discuss their compensation with each other, known as “Non-Retaliation for Disclosure of Compensation Information.” He also signed a memorandum instructing the Labor Department to draw up regulations under which federal contractors would be required to submit compensation data by race and sex.
Once the Labor Department creates those rules — which would be used to ensure compliance with equal pay laws — Chvotkin says he expects contractors to push back. New reporting requirements could force contractors to spend money on new payroll processing systems or on new employees to collect and analyze the data. “Most company payroll systems don’t capture data that way [by sex and race],” he said.
Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/executive-order-contractors-must-allow-employees-to-discuss-pay-with-each-other/2014/04/11/04c40e78-bf48-11e3-bcec-b71ee10e9bc3_story.html
April 17, 2014 by cs
The General Services Administration (GSA) failed to assess the negative impact that the Office Supplies 3 (OS3) strategic sourcing contract would have on small businesses, a Small Business Administration (SBA) analysis says.
Under the Small Business Act, agencies must determine whether new consolidated contracts would negatively affect small businesses, and the SBA is tasked with making sure the agencies execute the determination properly.
SBA undertook the analysis at the Government Accountability Office’s request after several small businesses protested to the OS3 request for proposals, saying GSA failed to look into the economic consequences of the businesses who don’t receive an OS3 award. FedNewsRadio posted a copy (pdf) April 7.
In response to the protests, GSA argued that the OS3 contract is a follow-on contract to the OS2 and not a consolidated contract. GSA also said it’s “contrary to law” to provide an economic analysis on the negative impacts a consolidate contract would have on small businesses.
SBA disagrees on both points.
Keep reading this article at: http://www.fiercegovernment.com/story/sba-says-gsa-failed-assess-negative-impact-os3-small-businesses/2014-04-08
April 16, 2014 by cs
The General Services Administration’s information technology contracting office is seeking industry feedback on plans for the next governmentwide contract vehicle for telecommunications and related services.
GSA is in the process of developing Network Services 2020, or NS2020, a slate of approved vendors offering everything from basic telephone and data services to niche satellite and infrastructure contracts for federal agencies. The request for information posted April 8, 2014 seeks industry feedback on how GSA should structure that global contracting vehicle.
GSA will begin soliciting bids in fiscal 2015 from vendors who want to be part of the NS2020 contract vehicle, according to the RFI. Contracts with the vendors approved under NS2020 will likely be available for 15 years or for 10 years with five option years, the RFI said.
NS2020 will replace Networx, a similar global contract vehicle for telecom services that’s set to expire soon, but will include a broader suite of services.
April 15, 2014 by cs
Competition for government contracts is becoming more cutthroat as federal spending shrinks by billions of dollars, with big companies swooping in on smaller ones and bid protests on the rise.
Routine contracts that in years past would have attracted just a handful of companies have become high-stakes bidding wars. Contractors are forced to make more aggressive offers, with slimmer margins. And industry officials say the gentleman’s agreement that often prevented losing companies from filing bid protests against their rivals has given way to a more desperate mentality.
The number of losing companies’ protests to the Government Accountability Office, which handles the vast majority of bid protests, has increased from 1,352 in 2003 to 2,429 last year. While that is a fraction of the total number of contracts awarded annually — less than 1 percent, by one estimate — the cases often show how tight the market has gotten and the extreme measures companies will take to win.
“Budgets are going down, which means competition for what contracts remain has increased tremendously,” said Jaime Gracia, president of Seville Government Consulting, which helps contractors win bids. Companies “are making strategic decisions about protesting because they have to. A lot of companies can’t afford to lose that contract.”
After the terrorist attacks of Sept. 11, 2001, spending on contracting soared. Fueled by the wars in Iraq and Afghanistan, it peaked in 2008 at about $541 billion, according to the Office of Management and Budget. But as the budget cuts known as sequestration went into effect, the figure dropped to $461 billion last year, and many predict it will continue to fall.
April 11, 2014 by cs
Commonly heard issues with federal government contracting (such as, “it takes too long,” “it’s too expensive,” “it’s overly bureaucratic,” or “it’s too burdensome”) often conclude with a determination that the government should adopt commercial acquisition practices.
Government contracting does have considerable regulation associated with it. The government version of “commercial contracting,” found in the Federal Acquisition Regulation Part 12, was an attempt to address this idea and has been somewhat successful. However, additional government-unique requirements have been added over time.
In many cases, a primary hurdle is that a customer can have unique requirements, making that customer the only customer.
Keep reading this article at: http://www.federaltimes.com/article/20140327/BLG06/303270007/Why-government-can-t-buy-more-like-business
April 9, 2014 by cs
According to the VA OIG, the VA failed to verify the claim of Westar Development Company, LLC to be a VOSB–and “[t]he evidence does not support a finding that Westar is or ever has been a Veteran-Owned Small Business.” The VA’s failure to verify Westar’s VOSB status is just one of many serious flaws identified by the VA OIG in its audit of the award of a major VA lease to Westar.
The VA OIG’s report (which is well worth a read if you have the time) examines the VA’s award of a build-to-suit lease to Westar for the new Butler Health Care Center in Butler, Pennsylvania. The 20-year lease had a total value of $152.7 million.
April 8, 2014 by cs
Braulio Castillo, the president of IT contractor Strong Castle, was arrested April 1 by Loudon County, Va., authorities and charged with first degree murder in the death of his estranged wife, Michelle.
Castillo gained notoriety as a result of a June 2013 hearing of the House Oversight and Government Reform Committee that examined the validity of the service-disabled veteran-owned small business (SDVOSB) status enjoyed by the firm he co-owned with his wife.
Castillo’s disability arose from a sports injury incurred at the U.S. Military Academy Preparatory School. Additionally, Castillo’s firm enjoyed a special status as a HUBZone company under a Small Business Administration program that gives preference to firms located in designated neighborhoods. SBA decertified Strong Castle’s HUBZone status in May 2013, while the Department of Veterans Affairs affirmed Strong Castles SDVOSB status last September.
keep reading this article at: http://fcw.com/articles/2014/04/02/castillo-murder-charges.aspx
April 3, 2014 by cs
Agencies are letting noncompetitive contracts awarded on the basis of “unusual and compelling urgency” run past the one year limit they’re not meant to exceed.
The Federal Acquisition Regulation (FAR) limits the total period of contracts awarded using the urgency exception to one year, unless a determination from the head of the agency is made that exceptional circumstances apply.
Awarding a noncompetitive contract on the basis of urgency is necessary in select circumstances, such as combat operations or preventing unanticipated gaps in program support, says the Government Accountability Offices in a March 26 report,
But those contracts should be limited in duration to minimize the amount of time that the government is exposed to the risks of contracts that are awarded quickly without the benefits of competition, the watchdog says.
Keep reading this article at: http://www.fiercegovernment.com/story/agencies-extended-noncompetitive-contracts-past-time-limits-gao-says/2014-03-27