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

2015 NDAA eliminates self-certification of WOSBs

December 23, 2014 by

With little fanfare, Congress just passed legislation eliminating the ability of WOSBs to self-certify for purposes of WOSB set-aside contracts.

The 2015 National Defense Authorization Act rewrites the portion of the Small Business Act governing WOSB set-asides, deleting what I have called the “trust but verify” option: the ability for putative WOSBs to self-certify as such, then back up their self-certifications by submitting supporting documentation to the WOSB Document Repository.  Instead, the 2015 NDAA would appear to require a formal certification in order for a small business to be awarded a WOSB set-aside contract.

Section 825 of the 2015 NDAA is entitled “sole source contracts for small business concerns owned and controlled by women.”  As the title suggests, the 2015 NDAA authorizes sole source awards for WOSBs and EDWOSBs–more on that soon in a separate blog post.  But the NDAA also amends the portion of the Small Business Act dealing with WOSB set-asides generally.

Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/wosb-program-2015-ndaa-eliminates-self-certification

 

Done deal? VA could finally have a contractor to help verify veteran-owned small businesses

December 22, 2014 by

It appears the Department of Veterans Affairs will move forward with a new contract supporting its program for verifying veteran-owned small businesses, more than a year after the VA ended the old contract and following a number of bizarre delays spurred by legal and regulatory wrangling.

CVE logoThe Small Business Administration has determined that Loch Harbour Group in Alexandria does indeed qualify to perform the work as a small business, according to the company’s attorney in the matter. That determination came after the VA filed a size protest that could have prevented the contractor from landing the work.

“It was a lot of work, on both sides, but it appears that the issues between Loch Harbour and the government have finally been resolved and they can move forward working together to do the important work of verification,” which is required to bid on work set aside by the VA, said Lee Doughterty, a principal at the Vienna office of law firm Offit Kurman who represents Loch Harbour.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/12/done-deal-va-could-finally-have-a-contractor-to.html

DHS seeks help of small businesses to develop security-related solutions

December 19, 2014 by

The Homeland Security Department’s research and development arm recently released a pre-solicitation notice to small businesses regarding the potential development of innovative technologies from forensics to cybersecurity to wearable communications.

DHS logoThe Science and Technology Directorate released the joint pre-solicitation with the Domestic Nuclear Detection Office, or DNDO, which is also part of DHS, through its Small Business Innovation Research, or SBIR, program. It focuses on nine areas, including seven for S&T and two for DNDO.

The program began accepting proposals starting Dec. 18, according to FedBizOpps.

“While we want to stimulate innovation to meet the needs of the homeland security enterprise by having offerers submit proposals that concentrate on proving the scientific and technical feasibility of their ideas, they must consider the commercialization potential of their proposed effort,” Lisa Sobolewski, S&T’s SBIR program director, said in a statement.

Keep reading this article at: http://www.fiercehomelandsecurity.com/story/dhs-seeks-help-small-businesses-develop-security-related-solutions/2014-12-11

Agencies awarding SBIR contracts to businesses owned by venture capital firms

December 17, 2014 by

Two of the agencies participating in a Small Business Administration innovation program opted to open the program to small businesses that are majority-owned by venture capital firms, says a Nov. 20 Government Accountability Office report.

The Health and Human Services Department and the Energy Department opted to open part of their Small Business Innovation Research programs to small businesses that are majority-owned by multiple venture capital or similar firms, allowing such companies to apply for and receive SBIR awards, the report says.

Specifically, HHS’s National Institutes of Health and the DOE’s Advanced Research Projects Agency allowed such companies to participate.

For fiscal 2013 and fiscal 2014, NIH and ARPA together received 20 applications from majority-owned portfolio companies and made 12 SBIR awards to them, totaling about $7.9 million, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/gao-2-agencies-awarding-sba-contracts-businesses-owned-venture-capital-firm/2014-11-25

How companies hide the spoils of winning government contracts

December 16, 2014 by

General Electric, the venerable maker of light bulbs, refrigerators, and other appliances, recently announced that it was selling off its consumer products division because the profit margins are too low. While GE bids that division goodbye, it’s holding onto its highly lucrative government-contracting business, in which a less-demanding customer leaves room for higher margins. Between 2007 and 2012, GE secured more than $16 billion worth of federal contracts, which might have something to do with the fact that it spent $150 million on lobbying during that period.

How often do these sorts of contracts roll in for companies that spend heavily on political advocacy? Unfortunately, there’s not enough public information to say.

Journalists and critics frequently bring up the dizzying totals that special interests put into elections—one estimate was that $3.7 billion was spent on last month’s midterms—but it’s much less common to hear about the impact of that money on the government’s decision-making.

Keep reading this article at: http://www.govexec.com/contracting/2014/12/how-companies-hide-spoils-winning-government-contracts/100572

GAO rejects last GSA office supply bid protest, contract now operational

December 15, 2014 by

The General Services Administration will be able to offer its third iteration of the office supplies strategic sourcing contract again after the last of its bid protests was denied.

The Government Accountability Office denied on Dec. 3, 2014 Coast-to-Coast Computer Product’s bid protest, claiming it didn’t have merit.

That marks the sixth unsuccessful bid protest of the GSA OS3 contract from various vendors since GSA announced the 21 awards in August.

The GAO decision lifts the stay of performance on OS3 and GSA can now offer OS3 to federal agencies, a Dec. 4 GSA statement says.

The OS3 contacting vehicle is meant to save the federal government money on everyday office supplies like pens, paper and printing items by providing agencies with a list of vendors with already negotiated prices.

Keep reading this article at: http://www.fiercegovernment.com/story/gao-rejects-last-os3-bid-protest-gsa-contract-back-open-business/2014-12-09

Inspector general releases report on critical risks facing the SBA

December 12, 2014 by

The Office of Inspector General of the U.S. Small Business Administration (SBA) has issued its semi-annual report focusing on the most critical risks facing the SBA, including several aspects of government procurement.

SBA - IGCovering the period April through September 2014, the OIG’s report covers key SBA programs and operations, including financial assistance, government contracting and business development, financial management and information technology, disaster assistance, management challenges, and security operations.

Of particular interest to the government contracting community are findings such as:

  • Over $400 million in federal contracts that were awarded to ineligible firms, which may have contributed to the overstatement of small business goaling dollars for the Small Disadvantaged Business and the HUBZone Business Preference Programs in FY 2013.
  • The owner of a Colorado real estate firm and 5 family members were charged in a 37-count indictment by a state grand jury in connection with a $2,323,000 SBA-guaranteed loan to refinance an office building and other existing debt.
  • Sixteen cases of contract-related bribery and/or fraud were identified in connection with contracts or subcontracts set-aside for 8(a), HUBZone, veterans, or other categories of small business.
  • The OIG was unable to determine if the SBA appropriately issued waivers to the non-manufacturer rule because of a lack of established procedures, missing files, and other deficiencies.

The OIG’s full report can be downloaded here: SBA OIG Semi-Annual Report to Congress – Fall 2014

VA demands review of company’s small business status, days after awarding it a contract

December 11, 2014 by

Days after the Department of Veterans Affairs awarded a contract to manage its verification program for veteran-owned small businesses, it’s questioning the winner’s own status as a small business.

The VA filed a size protest with the Small Business Administration against Loch Harbour Group Inc. of Alexandria, less than a week after awarding the company a $39.9 million contract to manage the VA’s Center for Veterans Enterprise, said Lee Doughterty, a principal at the Vienna office of law firm Offit Kurman who represents Loch Harbour.

That contract, which was set aside for veteran-owned small businesses and involves processing contractor applications to be verified as veteran-owned, was originally awarded to Monterey Consultants Inc. of Dayton, Ohio. The VA terminated the Monterey award in November, opting to take corrective action in response to a protest filed by Loch Harbour in the U.S. Court of Federal Claims.

“It is a terrible tactical move,” said Dougherty, who added that Loch Harbour was deemed qualified to compete for the work during the contract evaluation process. “The retaliation taken by the program and contracting officer is absolutely inappropriate and a gross violation.”

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/12/va-demands-review-of-companys-small-business.html?page=all

Federal contractors now find opportunities for growth in healing, not war

December 10, 2014 by

Two years ago General Dynamics, one of the biggest federal contractors, reported a quarterly loss of $2 billion. An “eye-watering” result, one analyst called it.

Diminishing wars and plunging defense spending had slashed the weapons maker’s revenue and left some subsidiaries worth far less than it had paid for them. But the company was already pushing in a new direction.

Soon after Congress passed the landmark Affordable Care Act, the maker of submarines and tanks decided to expand its business related to health care. Its 2011 purchase of health-data firm Vangent instantly made it the largest contractor to Medicare and Medicaid, the huge government health plans for seniors and the poor.

“They saw that their legacy defense market was going to be taking a hit,” said Sebastian Lagana, an analyst with Technology Business Research, a market research firm. “And they knew legislation was coming up that was going to inject funds into the health-care market.”

Keep reading this article at: http://www.washingtonpost.com/business/federal-contractors-now-find-opportunities-for-growth-in-healing-not-war/2014/12/04/3ed2ff08-7a63-11e4-9a27-6fdbc612bff8_story.html