GAO investigation into small business contracting fraud called for

This article was written by Lloyd Chapman, president of the American Small Business League. 

California Rep. Janice Hahn (D) has drafted an amendment to H.R. 1481 that would call for a new GAO investigation into fraud and abuses in federal small business contracting programs. In a March 25 hearing, Hahn Fraud Waste Abusequestioned whether the 23 percent of all federal contracts the SBA claimed were awarded to small businesses actually went to legitimate small businesses based on research done by my staff at the American Small Business League. She referenced firms such as Disney, Apple, Chevron, and Bank of America have been the actual recipients of federal contracts in FY2011 and FY2012 that the SBA claimed had been awarded to small businesses.

Keep reading this article at: http://thehill.com/blogs/congress-blog/economy-budget/241026-congress-should-back-gao-investigation-into-small-business

 

SBA urges GSA to delay implementation of proposed transactional data reporting requirement

On May 4, 2015, the Office of Advocacy of the U.S. Small Business Administration wrote the General Services Administration (GSA) regarding a proposed rulemaking for the collection of transactional data on Federal Schedule and non-Federal Schedule contracts.

GSA’s proposed rule involves the creation of a Common Acquisition Platform (CAP), an online marketplace to identify best-in-class contracts issued by GSA or other agencies.  The proposed rule would impose a Contractor Access Fee (80 Federal Register 11620, March 4, 2015).  The regulation proposed by GSA would create an immediate government-wide transactional data reporting requirement for non-Federal Supply Schedule (FSS) contracts. The requirement would be phased-in for FSS contracts.

The Office of Advocacy wrote GSA on May 4, 2015, regarding the proposed regulation and recommended postponing the rulemaking to conduct a formal stakeholder outreach process throughout the country.  Specifically, SBA’s Advocacy Office:

  • Urged GSA to conduct a more detailed impact assessment of this proposed rule on small businesses and take into consideration the rate of small business participation in the acquisition process and not just focus on the percentage of dollars being awarded to small businesses.
  • Would like GSA to examine the potential unintended consequences of this rule on small business resellers.  Most small businesses that are on a GSA schedule are value added resellers to the same original equipment makers who are also on GSA schedules.  Because of the lack of data in the Initial Regulatory Flexibility Analysis (IRFA), it is unclear how GSA will balance the potential conflict between these two business entities.

See Advocacy’s complete comments at  https://www.sba.gov/category/advocacy-navigation-structure/legislative-actions/regulatory-comment-letters.

For more information, contact SBA’s Major Clark at 202-205-7150 or major.clark@sba.gov.

Software vendors be warned: The old rules may no longer apply to government

Software vendors take notice: The General Services Administration (GSA) is proposing a new rule regarding something arcane but important.

GSA logoGSA has identified 15 terms and conditions common in commercial supplier agreements that it considers incompatible with existing federal law. And where there is a conflict, government’s own commercial terms rule. It’s designed to save everyone time. Vendors won’t have to comb their contracts for offending clauses — they just can’t be enforced.

For now it applies to any GSA contract that includes software. But don’t rule out the possibility of the rule going governmentwide.

For example, GSA is forcing an end to automatic renewals of period-limited software licenses or maintenance agreements. Instead, ordering agencies will award one-year with renewal options to be negotiated and re-awarded in subsequent years. The legal basis for this is that a contracting officer may not obligate funds that have not been appropriated, lest he or she be found in violation of the Anti-Deficiency Act.

Keep reading this article for a complete description of all the nullified terms and conditions: http://www.bizjournals.com/washington/blog/fedbiz_daily/2015/04/software-vendors-be-warned-the-old-rules-may-no.html

FBI readies multimillion dollar contract for cyber expertise

Finding the right workforce talent is never easy, but it’s a particularly challenging feat for the Federal Bureau of Investigation, which frequently requires subject matter experts with high clearances and diverse skill sets.

FBI SealTo fill its growing list of unique openings — especially in the cybersecurity arena — the FBI plans to contract out professional, management and support services for up to $100 million, according to a request for proposal synopsis posted last week.

The upcoming RFP, expected to be released by May 6, seeks a contractor with “the ability to recruit, retain and replace” operational subject matter experts.

Keep reading this article at: http://www.nextgov.com/cybersecurity/2015/04/fbi-readies-multimillion-contract-cyber-experts/111178

 

Contractors oppose plan to centralize Pentagon commercial purchasing

The largest contractors trade organization has asked the House Armed Services Committee to rethink several components of its bill to reform the Pentagon’s acquisition process, opposing in particular a plan to centralize decision-making on whether to buy products on the existing commercial market.

pentagon-sealThe 400-company Professional Services Council on April 17 sent a letter to committee Chairman Rep. Mac Thornberry, R-Texas, and top Democrat Rep. Adam Smith, D-Wash., calling their bill (H.R. 1597) a step in the right direction, but raising several objections over provisions they said might place contractors at a disadvantage while complicating acquisition management.

Thornberry’s Agile Acquisition to Retain Technological Edge Act is designed to streamline the acquisition process, modernize military technology and enhance workforce training.

But the bill’s plan to have the Defense secretary designate an individual to make determinations on whether an item sought by a Pentagon unit is commercially available “would likely result in actions contrary to Congress’ desire to foster greater reliance on commercial items and, at the same time, reduce competition,” said the letter from council President and CEO Stan Soloway, who served as an undersecretary of Defense during the Clinton administration.

Keep reading this article at: http://www.govexec.com/contracting/2015/04/contractors-oppose-plan-centralize-pentagon-commercial-purchasing/110647

Contractor alert: Suspensions and debarments keep climbing

The 2014 numbers are in – and they confirm that Federal marketplace remains volatile for government contractors.

Suspensions - FY 2010-2014

Debarments - FY2010-2014

According to the Interagency Suspension and Debarment Committee (ISDC), Federal agencies saw an uptick of about 14% in suspension and debarment proceedings.  Such exclusion proceedings remain among the chief tactics for combating alleged instances of fraud and misconduct in government contracting.  Overall, the ISDC reports that debarment actions rose from 1,696 in 2013 to 1,929 debarment actions in 2014.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=388574

GAO doubles down on FedBid ruling

The GAO has sustained a second protest based upon FedBid’s suspension of a contractor from its system.

For the second time in less than one week, the GAO held that the contractor’s suspension from FedBid–and resulting inability to bid on a contract–was improper because the matter was not referred to the SBA under the SBA’s Certificate of Competency procedures.

GAO-GovernmentAccountabilityOffice-SealThe GAO’s decision in Latvian Connection, LLC, B-410981 (April 6, 2015) involved a Department of the Interior RFQ for the fabrication and installation of mobile shelving system components.  The procurement was conducted through FedBid’s electronic reverse auction system.

Latvian Connection, LLC, wished to compete for the award.  However, in July 2014, FedBid suspended Latvian Connection’s FedBid user account.  The FedBid suspension notice stated, in part: “System and Business Integrity: Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid’s business relationships.”

Since Latvian Connection’s FedBid account was suspended, it was unable to compete for the procurement.  Latvian Connection filed a GAO protest.  It argued, in part, that its exclusion from the competition was a negative responsibility determination, which should have been referred to the SBA.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-doubles-down-on-fedbidcoc-ruling/

Florida company pays $250K to resolve alleged False Claims Act violations involving HUBZone status

Florida-based Air Ideal Inc. and its majority owner, Kim Amkraut, have agreed to pay the United States $250,000 to resolve allegations that they made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, the Justice Department announced April 8, 2015.  Under the settlement, the defendants must also pay five percent of Air Ideal’s gross revenues over the next five years.

“When companies falsely claim eligibility for government contracts set aside for HUBZone businesses, they not only misuse taxpayer funds, but they also deprive HUBZone communities of the benefits of the program,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division.  “This settlement shows that there is a stiff price to pay for obtaining government contracts through false statements.”

“The HUBZone program is an important tool in the government’s effort to strengthen our economy by encouraging businesses to grow in underutilized and disadvantaged areas,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida.  “We will not tolerate contractors who use deception to undermine its objectives and effectiveness.”

The purpose of the HUBZone program is to stimulate job growth in areas that have historically had low business investment.  Under the 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.

The United States’ complaint alleged that Air Ideal and 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 alleged that, in fact, this location was a “virtual office” where no Air Ideal employees worked, and that 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 and other fabricated documents for its purported HUBZone office.  The complaint further alleged that during the government’s investigation of this case, the defendants fabricated another version of its agreement for the virtual office and submitted that false document to the government.

The complaint alleged 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 the Interior.  Each of those contracts had been set aside exclusively for HUBZone companies.  The government’s complaint asserted claims against Air Ideal and Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery and Enforcement Act of 1989.

The settlement resolves allegations brought in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act by Patricia Hopson, who is employed in the construction industry.  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 did here.  As part of the resolution, Ms. Hopson will receive $42,500.

This matter was handled by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the Middle District of Florida, in conjunction with the SBA’s Office of Inspector General (OIG) and Office of General Counsel, the Department of Homeland Security’s Office of Inspector General, and the Defense Criminal Investigative Service.

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.).

Source: http://www.justice.gov/opa/pr/florida-company-and-owner-agree-resolve-alleged-false-claims-act-violations-regarding

Agencies gave SBA the wrong data for small business research contract spending

Most agencies submitted incorrect data about Small Business Innovation Research programs for fiscal 2013, so the Small Business Administration can’t fully determine compliance with spending requirements for the programs, says an April 15 Government Accountability Office report.

Agencies are required to submit the actual amount obligated for research and development, which is generally conducted by nonfederal employees outside of federal facilities. Those obligations are the basis for calculating the agencies’ spending requirements for small business programs, the report says.

Keep reading this article at: http://www.fiercegovernment.com/story/agencies-gave-sba-wrong-data-small-business-research-contract-spending/2015-04-16

GSA issues RFP for new leasing support services contract

The General Services Administration (GSA) has issued a Request for Proposal (RFP) for the third generation of its broker and leasing support services contract — formerly the National Broker Contract Program (NBC program), now GSA Leasing Support Services (GLS).  The new contract provides broker and leasing support services (i.e., market surveys, site visits, document preparation, negotiation) for GSA’s contracting officers, and is expected to generate approximately $100 million in rent credits to tenant agencies and significantly reduce lease cycle times by eliminating workload redundancy.

In November, GSA issued a draft solicitation for Leasing Support Services, which resulted in nearly 300 comments and questions from stakeholders. As a result of these comments, GSA revised the following components of the contract.

  • Strategic Planning Services: Revised strategic planning services language to give contractors more flexibility in reporting information about changes in market conditions, renegotiation opportunities, or changes in ownership rights within the shared portfolio.
  • Commission Agreements: Revised commission agreement language to make it more in line with normal broker industry practices.
  • Small Business: Added an additional evaluation factor so contractors who qualify as small businesses have more opportunities to compete.
  • Training: Clarified training language to specify who is required to take training, what type of training is required, and how the training will be offered.

“The stakeholder feedback we received on the draft solicitation was used to make GLS an even better contract for both the government and contractors,” comments GSA’s Assistant Commissioner for Leasing Chris Wisner.  “In addition to previous improvements made to GLS, contractors will now have even more flexibility when it comes to providing strategic planning services and commission agreements will be structured in accordance with normal broker industry practices. Small businesses will also have more opportunities to compete for prime awards.”

To submit a proposal, click here to find details.   The deadline for submitting proposals is Thursday, May 21, 2015. More information about previous improvements made to GLS can be found here.