Michigan subsidiaries of Georgia company to pay $3.8 million for falsely claiming DBE credits

January 10, 2014 by

The Justice Department announced on Jan. 9, 2014 that two related entities, Michigan-based Cadillac Asphalt LLC (Cadillac) and Michigan Paving and Materials Co. (MPM), have agreed to pay $3.8 million to resolve allegations that they falsely claimed Disadvantaged Business Enterprise (DBE) credits on a number of federally funded transportation projects.  Both Cadillac and MPM are subsidiaries of Oldcastle Materials Inc., a construction material and services provider based in Atlanta.

“The Disadvantaged Business Enterprise program helps businesses owned by minorities and women to work on federally funded projects,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.  “Those who falsely claim credits under the program to obtain federal funds victimize both the taxpayers and the businesses that the program is designed to assist.”

“The U.S. Attorney’s Office works with the Civil Division in Washington to use civil enforcement to recover funds for taxpayers,” said U.S. Attorney for the Eastern District of Michigan Barbara L. McQuade.  “In this case, civil attorneys were able to recover more than $3 million that was obtained through false claims.”

The settlement announced today resolves allegations that Cadillac and MPM knowingly and falsely claimed DBE credit for asphalt purportedly supplied by a DBE known as BN&M Trucking Inc.  As a condition of federal funding, contractors, such as Cadillac and MPM, working on a federally funded project must make a good-faith attempt to meet DBE participation goals.  For the contractors to meet their DBE participation goal, a DBE employed by the contractors must be independently responsible for performing a portion of the work with its own employees and equipment.  Allegedly, BN&M Trucking was merely a pass-through company that did not supply any asphalt or perform any other commercially useful function.

“We remain steadfast in our commitment to maintaining the integrity of the U.S. Department of Transportation’s (USDOT) Disadvantaged Business Enterprise program,” said regional Special Agent-in-Charge of USDOT’s Office of Inspector General Michelle T. McVicker.  “Working with the Secretary of Transportation, other DOT leaders and our law enforcement colleagues, we will continue to protect the taxpayers’ investment in our nation’s infrastructure from fraud, waste, abuse and violations of law.”

The allegations resolved by the settlement involved numerous federally funded transportation projects in Michigan between 2006 and 2010, including a project to construct a new runway at Detroit Metropolitan Wayne County Airport in 2008 and 2009.  In November 2010, two other entities, John Carlo Inc. and Angelo Iafrate Construction Co. Inc., paid more than $1 million to resolve similar allegations related to the airport runway project.

This case was handled by the Justice Department’s Civil Division, Commercial Litigation Branch, the U.S. Attorney’s Office for the Eastern District of Michigan and the Department of Transportation Office of Inspector General.  The claims settled in this case are allegations only; there has been no determination of liability.

GSA develops new building maintenance strategy, seeks private industry help

January 9, 2014 by

The General Services Administration wants industry feedback to help develop a new governmentwide program to maintain federal buildings.

GSA issued a request for information Dec. 18 tasking the private sector with providing best practices to assist in creating a new comprehensive building maintenance and operations services program that includes HVAC, elevator maintenance, janitorial services, grounds maintenance and utilities, the RFI says.

The federal government holds more than more than double the square footage of the top five commercial real estate companies in the United States combined. Federal Acquisition Service Commissioner Tom Sharpe said in the RFI that the new program “has the opportunity to significantly change the way the government approaches the services used to maintain and operate its buildings and structures, saving money and streamlining processes.”

Keep reading this article at: http://www.fiercegovernment.com/story/gsa-develops-new-building-maintenance-strategy-seeks-private-industry-help/2014-01-07

Defense budget set for 2014-15, but requires reconciliation

January 8, 2014 by

President Barack Obama signed on Dec. 26, 2013 two key pieces of legislation that detail the Defense Department’s budget for fiscal year 2014 and the federal government’s budget for fiscal years 2014 and 2015, detailed in a Reuters report.

Ros Krasny writes the signed defense authorization bill gives the Pentagon $526.8 billion in fiscal 2014, but the two-year budget compromise reached by congressional budget committee chairs Sen. Patty Murray and Rep. Paul Ryan allocates $498 million in Pentagon spending.

A final defense budget number will need to be reconciled early in the new year, Krasny reports.

Under the government-wide budget deal, spending will increase by $63 billion over sequester levels in fiscal years 2014 through 2015, Reuters reports.

Keep reading this article at: http://www.executivegov.com/2013/12/defense-2-year-budget-bills-paint-fy-2014-15-spending-picture/ 

SBA moves to ban firm from government contracting work

January 7, 2014 by

The Small Business Administration is moving to ban one of the government’s most prominent small-business contractors from new federal work, saying that the firm provided false information about its ownership and operations, documents show.

The SBA said it has information showing that Tysons Corner-based MicroTechnologies LLC and its founder, Anthony R. Jimenez, submitted “false and misleading statements” in order to receive preferential treatment, according to a Dec. 20 letter from the agency to the company. The company and Jimenez are effectively suspended from receiving new government work.

The agency said the false statements included one that “appears to be a complete fabrication” to hide the extensive role of two investors who apparently worked with Jimenez to launch, bankroll and operate MicroTech, according to a copy of the letter obtained by The Washington Post.

The SBA notice is the first step in a civil process that could lead to the banning of both Jimenez and MicroTech “from future contracting with any agencies of the Executive Branch of the United States Government,” the SBA said.

MicroTech did not respond to repeated requests for comment.

The company has 30 days to respond to the claims in the SBA’s regulatory action, which immediately makes the company and Jimenez ineligible for contracting work or any government assistance, such as loans, and proposes the “debarment” of the firm from future federal contracts.

Keep reading this article at: http://www.washingtonpost.com/investigations/sba-moves-to-ban-microtechnologies-llc-from-government-contracting-work/2013/12/27/a83ede02-6f02-11e3-b405-7e360f7e9fd2_story.html 

HealthCare.gov contract: Politics not a factor, but neither were firm’s ties to failed projects

January 6, 2014 by

CGI Federal, the company responsible for building the problem-plagued Web site for the Affordable Care Act, won the job because of what federal officials deemed a “technically superior” proposal, according to government documents and people familiar with the decision.

Not considered in the 2011 selection process was the history of numerous executives at CGI Federal, who had come from another company that had mishandled at least 20 other government ­information technology projects more than a decade ago. But federal officials were not required to examine that long-term track record, which included a highly publicized failure to automate retirement benefits for millions of federal workers.

By 2011, CGI Federal already had been cleared to do government work at the Centers for Medicare and Medicaid Services (CMS), the agency overseeing the rollout of the new health-care law.

The company had been included in a pool of pre-screened, approved contractors in 2007, during the George W. Bush administration, and only firms in that pool were later allowed to bid for the Affordable Care Act work. It was at that earlier time that the problems at American Management Systems, the Fairfax County IT contractor acquired by CGI, would have figured into the assessment of CGI Federal, contracting experts say.

In hindsight, one former CMS official said, the AMS record “could well have knocked [CGI Federal] out of the competition, and probably should have.”

Keep reading this article at: http://www.washingtonpost.com/politics/healthcaregov-contract-politics-not-a-factor-but-neither-were-firms-ties-to-failed-projects/2013/12/22/61728fca-6753-11e3-a0b9-249bbb34602c_story.html

FAR formally amended to provide accelerated payments to small subcontractors

January 3, 2014 by

For two years, it has been the policy of individual agencies of the federal government to encourage prime contractors, upon receipt of progress payments from an agency, to accelerate payments to small business subcontractors.  Now, this policy has been formalized by publication of a rule and contract clause in the Federal Acquisition Regulation (FAR), effective December 28, 2013.

Here is the background.  The Department of Defense (DoD), the General Services Administration (GSA), and the National Aeronautical and Space Administration (NASA) originally published a proposed rule in the Federal Register at 77 FR 75089 on December 19, 2012, to implement OMB Memorandum M–12–16 that would provide for the acceleration of payments to small business subcontractors.  OMB released  Memorandum M–12–16, Providing Prompt Payment to Small Business Subcontractors, on July 11, 2012. This policy memorandum outlined the steps agencies should take to ensure that prime contractors pay their small business subcontractors as promptly as possible.  OMB released Memorandum M–13–15, Extension of Policy to Provide Accelerated Payment to Small Business Subcontractors, on July 11, 2013.  This policy memorandum extended the OMB
Memorandum M–12–16’s expiration date by one year to July 11, 2014.

With the publication of a formal rule in the FAR, the accelerated payment policy is now in effect, government-wide.  Below is the clause that is to be placed in all federal contracts containing subcontracting opportunities:

FAR Part 52.232–40 

Providing Accelerated Payments to
Small Business Subcontractors (Dec. 

(a) Upon receipt of accelerated payments
from the Government, the Contractor shall
make accelerated payments to its small
business subcontractors under this contract,
to the maximum extent practicable and prior
to when such payment is otherwise required
under the applicable contract or subcontract,
after receipt of a proper invoice and all other
required documentation from the small
business subcontractor.
(b) The acceleration of payments under this
clause does not provide any new rights under
the Prompt Payment Act.
(c) Include the substance of this clause,
including this paragraph (c), in all
subcontracts with small business concerns,
including subcontracts with small business
concerns for the acquisition of commercial

More heads to roll in ‘Fat Leonard’ Navy scandal

December 31, 2013 by

Navy Secretary Ray Mabus said Friday that he expected more damning revelations about the way the service conducts business to come out of the ongoing investigation of the alleged fraudulent activities of Glenn Defense Marine Asia and its chief executive, Leonard Glenn “Fat Leonard” Francis.

“It’s fair to say there will be more disclosures coming” and more top officers coming under suspicion in the contracting for port services for Navy ships worldwide, Mabus said at a Pentagon briefing. “I certainly don’t think we’ve seen the end of it.”

“I expect to continue to see headlines” in the felony fraud case involving bribes and prostitutes in which Francis currently is out on bail and under house arrest in San Diego, Mabus said.

“I would rather get bad headlines than let bad people get away,” Mabus said.

While condemning the fraud, Mabus hailed the Navy’s response. He said the Naval Criminal Investigative Service began to suspect that one of its agents, John Beliveau II, was tipping off Francis about Navy inquiries on his firm in exchange for luxury trips and prostitutes.

Keep reading this article at: http://www.dodbuzz.com/2013/12/20/more-heads-to-roll-in-fat-leonard-navy-scandal/ 

Government cuts cause contractor revenue losses and strategic changes

December 30, 2013 by

Sequestration forced revenue losses among almost two-thirds of contractors in 2013, according to a survey by two consulting firms released last week.

Almost 31 percent of the 220 firms that responded to the survey by Market Connections Inc. and Lohfeld Consulting Group Inc. said their revenue fell by more than 10 percent, while another 30 percent reported declines of nearly 10 percent.

In response to government market pressures, contractors are re-architecting by expanding into adjacent markets (45 percent), modifying lines of business (35 percent), and putting greater emphasis on the front-end of the life-cycle to improve capture strategies an

More contractors are pursuing new opportunities in state and local government, international markets, and energy in 2013 than in 2012. Pursuit of healthcare opportunities is still high on the list of new and adjacent markets contractors are pursuing:

  • State and local government: 48 percent in 2013 vs. 29 percent in 2012
  • Healthcare: 39 percent in 2013 vs. 38 percent in 2012
  • International markets: 36 percent in 2013 vs. 29 percent in 2012
  • Energy: 33 percent in 2013 vs. 20 percent in 2012

“It is clear that sequestration and the government shutdown have had a tremendous impact on the government contracting community,” said Lisa Dezzutti, president and CEO of Market Connections, Inc. “Contractors need to think outside the box, leverage their expertise in adjacent markets and focus on business development and capture strategies that will increase win rates.”

Contractors are making the following investments in the front-end of the lifecycle to enhance the business development and capture process and increase win probability:

  • Improving capture and proposal processes: 40 percent
  • Adding more business development/capture personnel: 39 percent
  • Enhancing capture and proposal tools and infrastructure: 28 percent
  • Increasing use of consulting services: 19 percent
  • Adding more technical personnel to support business acquisition: 15 percent
  • Adding personnel to write proposals: 12 percent

A full copy of the survey results can be downloaded at: http://www.marketconnectionsinc.com/index.php/Infographics/sequestrationgovernmentshutdowninfographics.html?Itemid= 

New military spending deal includes help for small business contractors

December 27, 2013 by

In unusually speedy fashion, Congress this week approved both a new federal budget and a military spending bill, both of which provide a sense of clarity to small business owners, particularly those who sell goods and services to the federal government.

But there’s also a little something extra for small business contractors in the latter deal, called the National Defense Authorization Act (NDAA), which authorizes military spending for the coming year and was approved by the Senate late Thursday. In fact, there are two little somethings.

The 2014 version of the legislation, which President Obama is expected to sign in the coming days, included two amendments born earlier this year in the House Small Business Committee, both of which are meant to help small firms in the procurement arena.

The first changes the way prime contractors are allowed to tally up the amount of subcontracting dollars they pass along to small businesses. Currently, the federal government can take into account every small business that works on a given project, even if they are a subcontractor to another subcontractor, when calculating the amount of federal awards that went to small companies in a given year.

Second, the bill includes a rule meant to clarify some confusion over rules concerning the amount of work small prime contractors are allowed to subcontract to large firms.

Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/new-military-spending-deal-includes-help-for-small-business-contractors/2013/12/20/fe0270d2-6990-11e3-ae56-22de072140a2_story.html 

Couple sentenced in huge State Department fraud scheme

December 26, 2013 by

A former State Department contractor and her husband were sentenced to prison on Dec. 6, 2013 for orchestrating a multi-million dollar fraud scheme.

Kathleen McGrade will serve two years under the sentence meted out in federal court; Brian Collinsworth will serve 18 months for his role in the convoluted scam, according to court filings and a news release from the U.S. attorney’s office for the eastern district of Virginia.

In an August plea agreement, the couple admitted to defrauding the government and money laundering. Along with prison time, they have to forfeit houses, a yacht, a Steinway piano and other property valued at almost $7.9 million, the release said.

Keep reading this article at: http://www.federaltimes.com/article/20131206/DEPARTMENTS08/312060008/Couple-sentenced-huge-State-Department-fraud-scheme