Georgia Tech Procurement Assistance Center

Construction company pays $5.4 million over disadvantaged business fraud claims

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DBE FraudA San Diego-based construction company has paid $5.4 million to resolve allegations that it fraudulently billed the federal government for work on multiple projects on military bases, including Camp Pendleton, the U.S. Attorney’s Office announced Wednesday.

It was alleged that Harper Construction Company Inc. knowingly used sham, small disadvantaged businesses and then falsely certified to the government that it used legitimate small disadvantaged businesses.

Harper Construction, a privately held general contractor, earns a substantial portion of its revenue through government contracting on construction projects across the country, prosecutors said.

The settlement involves four government contracts to construct facilities at Camp Pendleton and Camp Lejeune, North Carolina. The contracts required Harper to subcontract a certain percentage of work to small disadvantaged businesses.

Keep reading this article at: http://timesofsandiego.com/crime/2016/06/01/san-diego-construction-company-pays-5-4m-fraud-claims/

Read earlier report on this case at: http://gtpac.org/?p=7837

FedBizOpps: Should it get more respect?

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Guy TimberlakeMarketing is a valuable tool that can do wonders to help an organization achieve its goals. For companies focused on selling goods and services to government agencies and other government contractors, creating targeted and robust awareness of why they matter and how they can help are critical.

There are times, however, when marketing is not a friend to government contractors.

One of those times is when a company has achieved the “holy grail” of opportunity development: being in front of the opportunity and having connected the dots of information and relationships with the budget, need and authority dots. What would cause a company to consider marketing an adversarial activity in that situation? When the agency determines a need to “market” the opportunity to seek interest from other potential vendors.

Let’s face it, if you’ve spent time and money developing the opportunity to include influencing the solution, pricing and acquisition strategy, you are not going to be a fan of letting others try and take a bite of that apple, right?

FedBizOpps

Keep reading this article at: http://publicspendforum.net/fedbizopps-respect/

What is driving government tech buys?

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technologyTechnology purchases are on the rise, according to the Gartner technology research firm. “The U.S. state and local government IT market is turning the corner with a renewed focus on modernization and innovation, along with budgets back in positive territory,” say Gartner analysts. In its recent “Market Insight: State and Local Government IT Market Primer,” the firm notes that state and local enterprise IT budgets will reach $71.9 billion in 2016 and climb to $72.8 billion in 2017.

The ever-expanding Internet of Things (IoT), where devices, vehicles and other items are embedded with software, sensors and connectivity, is also helping loosen government agencies’ purse strings.  Cisco’s Internet of Everything site predicts a $4.6 trillion market in IoT for the public sector in smart cities, outfitting the next-generation worker, traffic management and other apps.

“Anything related to open data and data management will see big growth” as a result of IoT implementations, says Andrew Hacker, Cyber Security Expert in Residence at Harrisburg University (Pa.) of Science and Technology.

Keep reading this article at: http://m.americancityandcounty.com/coop-solutions/what-driving-government-tech-buys

See related report, Top Strategic Predictions for 2016 and Beyond: The Future Is a Digital Thing, at https://www.gartner.com/user/registration/prospect?resId=3142020&srcId=1-6595640805&cm_sp=gi-_-free-_-heroleft

See related article, How technology is influencing cooperative purchasing,  at http://m.americancityandcounty.com/hardware-software/how-technology-influencing-cooperative-purchasing

 

Contractors expect higher profits in 2016

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GrowthThere is plenty of good news in Deltek’s latest Clarity survey of the government contracting industry, including reported increases in profits and growth, the first time both have increased in the same year.

Net profits are expected to be in the 10 percent range in the coming year and growth rates should hit 11 percent, according to the survey results. Both are up from last year’s results. The Clarity report is based on a 100-quesiton survey taken by 583 people in the government market.

In addition to increases in profits and growth, respondents to Deltek’s survey see four other major trends:

  • Oversight levels out but will intensify
  • Talent management remains a focal point
  • Data security is a top concern
  • Market diversity is seen as a key success factor

Keep reading this article at: https://washingtontechnology.com/blogs/editors-notebook/2016/05/deltek-clarity-report-results.aspx

Deloitte Consulting agrees to pay $11 million for alleged false claims on GSA contract

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GSA logoThe Department of Justice (DOJ) has announced that Deloitte Consulting LLP (Deloitte) has agreed to pay $11.38 million to resolve allegations under the False Claims Act that it submitted false claims under a General Services Administration (GSA) contract.  Deloitte is a nationwide consulting company headquartered in New York City.

In 2000, GSA awarded Deloitte a contract for the provision of information technology services.  The contract required Deloitte to reduce the prices it charged the government if it offered lower prices to specific commercial customers during the course of the contract.  GSA refers to this as “best customer” pricing, a requirement of GSA Schedule contracts.

The settlement resolves allegations that between 2006 and 2012, Deloitte failed to comply with the price reductions clause in its contract, resulting in government customers paying more for Deloitte’s services than comparable commercial customers.

Justice Dept. seal - CopyThis case was handled by the DOJ’s Civil Division’s Commercial Litigation Branch and the GSA Office of Inspector General.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/deloitte-consulting-llp-agrees-pay-11-million-alleged-false-claims-related-general-services

SBA’s appeals office reaffirms 70% threshold for economic dependence affiliation

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SBA logo smallUnder the Small Business Administration’s affiliation rules, one of the many ways a small business can be deemed affiliated with another is through the economic dependence rule: where a small business derives 70% or more of its revenues from another entity, the SBA ordinarily considers it to be economically dependent upon — and thus subject to the control of — that other entity.

So it was in a recent decision from the SBA’s Office of Hearings and Appeals (“OHA”), which confirmed the so-called “70% rule” for economic dependence.

In Size Appeal of Core Recoveries, LLC, SBA No. SIZ-5723 (Mar. 21, 2016), the SBA Area Office, “acting on an anonymous complaint,” challenged Core Recoveries’ size under NAICS code 561440 (Collection Agencies), which carries a $15 million size standard. The Area Office alleged that Core Recoveries was affiliated with a large business, West Asset Management.

Core denied the Area Office’s allegations, and explained that, as of the date of the SBA’s November 19, 2015 inquiry, “West maintained only 1,616 accounts with [Core Recoveries], which represented only 1.1% of [Core’s] total account volume on that date.” Additionally, Core said that it no longer had an active contract with West.

Nonetheless, the Area Office found Core to be affiliated with West through economic dependence. Under OHA precedent, a small business is automatically deemed affiliated with another entity where the small business derives more than 70% of its revenue from that other entity. (There is a limited exception for new businesses, which didn’t apply here).

Keep reading this article at: http://smallgovcon.com/sbaohadecisions/sba-oha-reaffirms-70-threshold-for-economic-dependence-affiliation/

Contractors see some goodies in big Defense bill

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LPTA addressed in 2017 NDAAThe grab-bag $610 billion defense policy bill now at the halfway point in its journey through Congress has the contracting community upbeat about some procurement and small business reforms while wary of debate about the extent to which defense contractors will be subject to President Obama’s Fair Pay Safe Workplaces executive order.

A version of the fiscal 2017 National Defense Authorization Act passed the House May 19 by a 277-147 vote, while a slightly different version cleared the Senate Armed Services Committee the same day 23-3.

“Building on last year’s initial set of improvements to the acquisition system, the FY17 NDAA makes foundational reforms intended to help get better technology into the hands of the warfighter faster and more efficiently,” said a summary by House Chairman Mac Thornberry, R-Texas. “It does so by requiring weapon systems to be designed with open architectures that can easily be upgraded as technology and threats evolve. It also provides flexible funding to experiment with new technology, while simplifying the process and expanding the avenues of competition for suppliers of all sizes.”

Keep reading this article at: http://www.govexec.com/contracting/2016/05/contractors-see-some-goodies-big-defense-bill/128541

SBA issues new rules affecting small business affiliation — and lots more

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Federal RegisterBack when the U.S. Congress was adopting the 2013 version of the National Defense Authorization Act (NDAA), it included directives to the Small Business Administration (SBA) to make changes to multiple rules pertaining to small business set-aside contracts and subcontracting.  On Monday, May 31, 2016, the SBA published final rules in the Federal Register implementing each of these changes.

The rule changes are wide ranging, amending SBA’s nonmanufacturer rule and affiliation rules, and for the first time allowing joint ventures to qualify as small for any government procurement as long as each partner to the joint venture qualifies individually as small under applicable size standards.

All of the changes can be seen at: https://www.federalregister.gov/articles/2016/05/31/2016-12494/small-business-government-contracting-and-national-defense-authorization-act-of-2013-amendments.

Here is a summary view of some of the most significant changes being made:

  • Affiliation. In the case of a solicitation for a bundled contract, a small business contractor may enter into a Small Business Teaming Arrangement with one or more small business subcontractors and submit an offer as a small business without regard to affiliation, so long as each team member is small for the size standard assigned to the contract or subcontract. This is a major change.  Previously, small businesses risked losing small business status if combined employees or gross revenues exceeded SBA’ s size standards.  This new concept applies to joint ventures as well.  A joint venture of two or more business concerns may submit an offer as a small business for a federal procurement, subcontract or sale so long as each concern is small under the size standard corresponding to the NAICS code assigned to the contract.  In addition, the new rule provides that firms owned or controlled by married couples — in addition to parties to a civil union, parents, children, and siblings — are presumed to be affiliated with each other if they conduct business with each other, such as subcontracts or joint ventures or share or provide loans, resources, equipment, locations or employees with one another. This presumption may be overcome by showing a clear line of fracture between the concerns. Other types of familial relationships are not grounds for affiliation on family relationships.
  • Procurement Center Representatives.  The SBA has Procurement Center Representatives (PCRs) located at federal agencies and military bases which have major contracting programs.  Under the new rules, PCRs are to review all acquisitions that are not totally set aside for small businesses to determine whether a set-aside or sole source award to a small business is appropriate and to identify alternative strategies to maximize the participation of small businesses in the procurement. PCRs are also to advocate against the consolidation or bundling of contract requirements (which tend to adversely impact small business contract participation), and reviewing any justification provided by the agency for consolidation or bundling. This review includes acquisitions that are Multiple Award Contracts (MACs) where the agency has not set-aside all or part of the acquisition or reserved the acquisition for small businesses. It also includes acquisitions where the agency has not set-aside orders placed against MACs for small businesses.  Also, for the first time, PCRs may receive unsolicited proposals from small businesses.  They are to send such proposals to the agency personnel responsible for reviewing such proposals, and the agency personnel are to provide PCRs with information regarding the disposition of each proposal.
  • Subcontracting to Small Businesses.  A prime contractor that identifies a small business by name as a subcontractor in a proposal, offer, bid or subcontracting plan is now obligated to notify those subcontractors, in writing, prior to identifying the concern in the proposal, bid, offer or subcontracting plan.  Safeguards against naming a subcontractor that the prime really doesn’t intent to use are also strengthened.  The new rules state that anyone who has a reasonable basis to believe that a prime or a subcontractor may have made a false statement with respect to subcontracting plans is to report the matter to the SBA’s Office of Inspector General. All other concerns as to whether a prime contractor or subcontractor has complied with SBA regulations or otherwise acted in bad faith may be reported to the Government Contracting Area Office where the firm is headquartered.  Contractors who are judged to have acted in bad faith may be found to be in material breach of contract and subject to liquidated damages under their contract.
  • Limitations on Subcontracting.  The rules have changed for the amount of work a small business may subcontract out.  In order to be awarded a full or partial small business set-aside contract with a value greater than $150,000, a small business concern now must agree that:

    (1) In the case of a contract for services (except construction), it will not pay more than 50% of the amount paid by the government to it to firms that are not similarly situated.  (Any work that a similarly situated subcontractor further subcontracts will count towards the 50% subcontract amount that cannot be exceeded.)

    (2) In the case of a contract for supplies or products (other than from a non-manufacturer of such supplies), it will not pay more than 50% of the amount paid by the government to it to firms that are not similarly situated. (Any work that a similarly situated subcontractor further subcontracts will count towards the 50% subcontract amount that cannot be exceeded.) Cost of materials are excluded and not considered to be subcontracted.

    (3) In the case of a contract for supplies from a non-manufacturer, it will supply the product of a domestic small business manufacturer or processor, unless a waiver is granted.

    (4) For a multiple item procurement where a waiver has not been granted for one or more items, more than 50% of the value of the products to be supplied by the non-manufacturer must be the products of one or more domestic small business manufacturers or processors.

    (5) For a multiple item procurement where a waiver is granted for one or more items, compliance with the limitation on subcontracting requirement will not consider the value of items subject to a waiver. As such, more than 50% of the value of the products to be supplied by the non-manufacturer that are not subject to a waiver must be the products of one or more domestic small business manufacturers or processors.

    (6) For a multiple item procurement, the same small business concern may act as both a manufacturer and a non-manufacturer.

  • Contracts Set-Aside for Service Disabled Veteran Owned Small Businesses.  Under the new rules, a joint venture comprised of at least one Service Disabled Veteran Owned Small Business (SDVOSB) and one or more other businesses may submit an offer as a small business for a competitive SDVOSB set-aside procurement, or be awarded a sole source SDVOSB contract, so long as each concern is small under the size standard corresponding to the NAICS code assigned to the procurement.

All of these rule changes are effective on June 30, 2016.

 

Two new rules impacting federal contractors expected to be finalized by year’s end

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DOLThe U.S. Department of Labor (DOL) has signaled it intends to issue a final rule to fully implement the President’s July 31, 2014 “Fair Pay and Safe Workplaces” Executive Order by August 2016.  The Order creates disclosure and compliance requirements for contractors on federal contracts valued at $500,000 or more.  Per the proposed rules, contractors must disclose violations of labor, employment, wage payment and safety laws during the contract bidding and renewal process.  The last action taken on this regulatory matter was May 2, 2016 when revised implementing rules were sent to the Office of Management and Budget (OMB) for finalization.

DOL also plans to issue a final rule that will implement the “Establishing Paid Sick Leave for Contractors” Executive Order by September 2016. Under the rule being proposed, contractors will be required to provide up to 56 hours, or 7 days, of paid sick leave per year to their employees on federal contracts entered into after January 1, 2017.  Subcontractors also will be required to provide paid sick leave to employees performing work on a covered contract.  The comment period on this new requirement closed on April 12, 2016, so it is likely that the final steps of the regulatory process will be finalized year’s end.

The status of these two rules as well as others affecting employers may be found on the U.S. Department of Labor’s spring 2016 rule list published here.

 

Past performance a big deal for Alliant 2 competitors

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GSA logoSometime in June, $65 billion in federal IT business will be up for grabs under the Alliant 2 governmentwide acquisition contracts. The requests for proposals from the General Services Administration will likely grab the attention of nearly all the major IT contractors looking to boost profits amid a contracting environment ripe with consolidation and budget tightening.

The Alliant 2 Unrestricted, with a ceiling of $50 billion over 10 years, and Alliant 2 Small Business, with its $15 billion ceiling, represent the largest IT contract of the year and perhaps of the next decade. And its objective methodology for selecting winners is likely to make it also among the most competitive.

Building on the approach GSA used in 2013’s One Acquisition Solution for Integrated Services contracts, companies will self-score relevant experience and various certifications in a points-based system set by GSA. (Brian Friel, founder of One Nation Analytics, published a thorough write-up on this process in Nextgov in March).

Keep reading this article at: http://www.nextgov.com/big-data/2016/05/past-performance-big-deal-alliant-ii-competitors/128144/

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