September 26, 2013 by cs
Minnesota has failed for three years to meet federal requirements for a program designed to steer millions of dollars in state transportation projects to minority- and women-owned businesses.
The program has been so plagued by mismanagement and weak oversight that some firms were awarded multimillion dollar contracts for which they might not have otherwise qualified.
In one case, nearly $1.6 million for buying materials on the Union Depot project in St. Paul was funneled through a minority- or women-owned firm to a non-minority-owned contractor. In another case on the same project, nearly $2 million was improperly credited to a non-minority-owned firm.
The findings and others, included in an internal audit of the Disadvantaged Business Enterprise (DBE) program, have led to a shake-up in the Minnesota Department of Transportation’s Office of Civil Rights and may result in additional investigations.
“This is absolutely a wake-up call,” said state Sen. Scott Dibble, DFL-Minneapolis, chairman of the Transportation and Public Safety Committee. Given the gravity of the issues raised by MnDOT’s internal audit, Dibble said he may ask the Legislative Auditor’s Office to conduct its own independent review.
Transportation department officials said they are moving quickly to address the shortcomings cited in the audit of the DBE program.
“This is a high priority for Commissioner [Charles] Zelle and the agency. We need to ensure that all contractors have an opportunity to work on MnDOT projects,” MnDOT spokesman Kevin Gutknecht said in an e-mail. “MnDOT fully supports diversity and believes that a diverse workforce, internally and externally on MnDOT projects provides a stronger and better outcome and better projects.”
The 30-year-old DBE program has long been plagued with fraud and oversight problems at both the federal and state levels. In 2010 and 2011 alone, U.S. Department of Transportation fraud investigations led to $88 million in recoveries, restitutions and fines, along with 10 federal indictments and eight criminal convictions.
Keep reading this article at: http://www.startribune.com/local/east/224726392.html?page=all&prepage=1&c=y#continue
September 24, 2013 by cs
Small businesses need to pay closer attention than ever to their “small business size status.”
New rules from the Small Business Administration (SBA), recently published in the Federal Register, require that small businesses:
- Accurately maintain their size status with the federal government, and
- Face substantial financial penalties, if willful misrepresentation of size or socioeconomic status is proven.
What actions are expected to be taken by small businesses?
First and foremost, it’s imperative that every small business update its profile in the System for Award Management (SAM) at least once a year. A small business failing to perform annual updating will no longer be identified in the SAM database as a small business. Lack of updating also will cause a firm’s other socioeconomic designations (such as SDB, 8(a), HUBZone, WOSB, EDWOSB, VOSB and SDVOSB) to be dropped from SAM. Losing these designations in SAM potentially means losing eligibility for federal contracts set-aside for various small business classifications. Firms not identified as small businesses also will not likely be considered as potential subcontractors by prime contractors who are required to meet small business subcontracting goals.
The possible penalty for a business misrepresenting itself as a small business has never been as severe as now. If the SBA finds that a business “willfully misrepresented” itself as a small business in order to win a federal contract, the agency can cancel the contract and impose a penalty equal to the total dollar value of the contract. Previously, when a contractor misrepresented its size or small business status, the contractor had to forfeit its contract and pay back profits associated with the contract.
The bottom line is this. Businesses should make sure they update SAM at least annually. In addition, businesses should expect to see a new certification form in bid and proposal solicitations, requiring each small business to certify its status as a small business along with any other socioeconomic classification the firm may hold. The form must be signed by an authorized official. If a federal solicitation does not contain a certification section, offerors (bidders and proponents) are expected to prepare a signed certification of their own to be included in their offer.
September 24, 2013 by cs
The threat of a federal government shutdown is even more bad news for a defense industry struggling to weather sequestration.
Following a summer of Pentagon furloughs and with other sequestration cuts starting to sink in, the government — caught between a gridlocked Congress and a dug-in White House — is marching to the brink of a complete halt, which industry sources say could do irreparable damage to defense firms.
“A shutdown means that there’s no additional funding that is made available for contracts,” said Elizabeth Ferrell, a partner at McKenna Long & Aldridge who’s worked in government contracts law for more than 30 years. “So with very limited exceptions, there are no new contract awards, no additional funding obligated to existing contracts, contractors are faced with performing when there are no government people around, government people will be furloughed.”
Defense contractors would have to work in a vacuum, she said, when normally they rely on give-and-take with government employees. “The government will cease to function, except for a very limited number of essential people,” she predicted.
Keep reading this article at: http://www.politico.com/story/2013/09/defense-firms-brace-for-hard-hit-of-a-shutdown-97179.html.
September 23, 2013 by cs
Awaiting U.S. Senate approval is a bill passed by the House of Representatives this summer that would require the Department of Defense (DoD) to take steps toward the development of a contracting program, patterned after a program developed by the Department of Veterans Affairs (VA), designed to increase contract awards to veteran-owned small businesses (VOSBs).
Back in June, Rep. Michael Fitzpatrick of Pennsylvania introduced, and the House unanimously passed, an amendment to the National Defense Authorization Act of 2013. If approved by the Senate and signed into law, the DoD will be required, as a first step, to perform a study analyzing the potential benefits of adopting its own “Vets First” program. DoD would work with the VA and the Small Business Administration (SBA) to develop a report detailing what impact contract set-asides for VOSBs would have on issues like veteran entrepreneurship and veteran unemployment.
If this law is implemented, it is presumed that DoD would develop a program similar to the VA’s Vets First Program. Created in 2006, through the enactment of the Veterans Benefits, Health Care and Information Technology Act of 2006, Vets First allows the VA to designate (“set aside”) certain contracts exclusively for VOSB and service-disabled veteran-owned small business (SDVOSB) concerns. The VA’s Vets First program favors VOSB and SDVOSB companies over other disadvantaged groups when the VA sets aside a procurement for small business. In its first seven years, the program has resulted in the award of tens of millions of dollars in contracts for VOSB and SDVOSB companies.
The Georgia Tech Procurement Assistance Center (GTPAC) will follow this story and will keep GTPAC clients advised of any developments.
September 23, 2013 by cs
The SBA originally planned to evaluate its Patriot Express loan-guarantee program by the end of 2010, but instead extended it through December 2013, a Sept. 12 report from the Government Accountability Office says. With the extension now near its end, the SBA has still yet to evaluate it or make a plan to do so.
In recent years, Patriot Express loans — for businesses majority-owned by veterans and other members of the military community — defaulted at more than three times the rate of other SBA loans.
The GAO report says SBA has not established any measurable goals for the program.
Keep reading this article at: http://www.fiercegovernment.com/story/another-sba-pilot-goes-unevaluated/2013-09-16
Download the GAO report at: http://www.gao.gov/assets/660/657793.pdf
September 18, 2013 by cs
A bipartisan pair of lawmakers has asked the Defense Department to rethink its plan to cut staff by 20 percent at top headquarters offices, asking for the Pentagon to exhaust all other options before taking negative personnel actions.
Reps. Bill Young, R-Fla., and Pete Visclosky, D-Ind., chairman and ranking member of the House Appropriations Defense Subcommittee, said in a letter to Defense Secretary Chuck Hagel that department cuts should be made after careful analysis, and not based on “arbitrary goals.” Hagel announced the planned workforce reductions in July.
The appropriators called for an organizational review that “considers recommendations to eliminate certain functions and certain contracts entirely, rather than across-the-board cuts to all functions.”
Young and Visclosky emphasized the Pentagon’s legal obligation to conduct a cost comparison before replacing any civilian employees with contract workers. In trimming the workforce, they said the “total workforce should be considered,” including contractors, and that the review should identify any contractors that are “illegally performing inherently governmental functions.”
September 17, 2013 by cs
Wisconsin Attorney General J.B. Van Hollen has announced that on September 5, 2013, the bankruptcy court for the Eastern District of Wisconsin denied discharge of an $882,000 debt owed to the Wisconsin Department of Transportation (DOT) for overcharges made by Buveck Consultants, LLC, and its owner, Thomas L. Burse. Burse and Buveck overbilled the Wisconsin DOT $1.3M through the Disadvantaged Business Enterprise Program. Burse also lied to obtain certification in the program, claiming to possess three college degrees despite possessing none. DOT discovered these deceptions, debarred the company from participation in DOT contracts, and offset $500,000 in pending Burse/Buveck claims against the $1.3M owed.
In November 2011, Burse filed bankruptcy for himself and his company in Milwaukee, seeking to discharge the $882,000 balance. The DOT objected to discharge in the Burse bankruptcy, asserting that the debt was incurred by fraud.
Although the balance is also owed by the prime contractors that employed Buveck, and despite the fact that all of the fraud was committed through the LLC, the bankruptcy court upheld the Department’s objection to Burse’s discharge. The court awarded judgment against Burse for $882,000, providing that prime contractors compelled to pay any portion of that claim shall also have the right to collect from Burse under the state’s judgment. Debra L. Remington and Mark Bromley represented the Department. Kathleen Chung represented the DOT.
A copy of the Amended Complaint is available here.
September 16, 2013 by cs
A new crop of solicitations has been posted in the past few weeks to the government’s startup website for simplified government contracting RFP-EZ.
There were 15 solicitations on RFP-EZ Monday afternoon, including one for a new mobile application to help the U.S. Marine Corps communicate with marines and recruits and one for a new health promotion Web tool for the Health and Human Services Department.
That’s more than double the six solicitations posted to the site early this year in a first-round beta test.
September 10, 2013 by cs
Note: Last year, the Small Business Administration launched an experimental web site called “EZ-RFP” to solicit streamlined bids for some low-cost technology projects as a way of assisting small, high-growth technology firms to do business with the federal government. This article reports on the status of this pilot project.
A novice might think The MIS Department, a Chicago technology firm, would have no trouble winning government contracts.
The company has a proven track record engineering complex computer systems and building websites. It has done the arduous legwork of getting authorized to provide services to the federal government, the state of Illinois, Cook County and the city of Chicago. It’s even filed paperwork for 8(a) certification, which allows the company to compete for a special class of contracts reserved for minority-owned small businesses.
And, get this: Company president Rajeev Chopra was chief information officer for President Obama’s 2012 reelection campaign, responsible for keeping a suite of information technology tools up and running for more than 2 million staffers and volunteers across 813 field offices.
But even with all that going for it, MIS, which stands for Management Information Systems, for years was unable to take a government contract to the finish line.
Why? Most of the company’s dozen or so employees were busy, for one thing, working on IT contracts with Chicago businesses and political groups in Washington that Chopra encountered during the campaign. That left only Devlin Kane, director of business development, to try to drum up government work.
Keep reading this article at: http://www.nextgov.com/emerging-tech/2013/08/how-win-government-contracts-ez-way/69704
September 9, 2013 by cs
With economic espionage and domestic surveillance creating a climate of cyber insecurity, some intellectual property attorneys now employ encrypted communications to correspond with federal contractor clients.
Tools such as RedPhone, a mobile voice app, and Silent Circle, a text, video and voice service, are among the more user-friendly technologies in use. Civil liberties activists, dissidents and some journalists have long resorted to cryptography to protect information, but some assembly was always required. The new secret message techniques still require trading a little convenience for confidentiality.
In an attempt to promote wider adoption, and perhaps his business, James Denaro, a patent litigation attorney with the CipherLaw Group, tweeted Friday night: “We use@Silent_Circle phone and text and encourage our clients to use it to contact us.”
Keep reading this article at: http://www.nextgov.com/cybersecurity/2013/08/contractors-now-using-encrypted-calls-and-text-legal-advice/69341/