As federal contracts shrink, minority-owned small business participation drops-off
August 14, 2013 by cs
About 17 percent of the U.S. population is Hispanic, and 13 percent is black. In federal small-business contracting, award ratios for those groups are in the single digits.
Small businesses, called the “drivers and engines of growth” by President Barack Obama, attracted about $98.2 billion in government awards last year, according to data compiled by Bloomberg. Hispanic-owned companies won about 8.4 percent of that total, or $8.21 billion, while black-operated small businesses won about 7.2 percent, or $7.1 billion.
“The needle hasn’t moved,” said Ruth Sandoval, president of the National Hispanic Business Group, a New York-based organization representing business owners.
The gap may reflect stiffer competition over a shrinking pool of contract revenue as agencies cut spending. Black- and Hispanic-owned businesses also may have difficulty breaking into the $512 billion market because acquisition officers don’t have a mechanism to specifically target those companies.
Small businesses are generally defined by the government as having fewer than 500 employees or less than $7 million in average annual sales.
Contracts for black-owned small companies declined about 1 percent in the year that ended Sept. 30, 2012 from the previous fiscal year. Awards to the Hispanic-owned businesses rose 1.5 percent — a gain that wasn’t enough to compensate for a bigger drop in fiscal 2011, according to federal procurement data.
Keep reading this article at: http://www.bloomberg.com/news/2013-08-08/minority-owned-small-businesses-trail-as-u-s-contracts-shrink.html
DoD’s reduced furloughs mean delays and cuts in contracts
August 13, 2013 by cs
The Defense Department’s decision to trim the number of furlough days for employees came at a cost to contractors, with the Pentagon making up for the sacrificed savings by delaying and trimming contracts, among other things.
The savings needed to be found somewhere. The original plan to furlough employees for 11 days would have saved about $2 billion; trimming that number to six days, which was announced Tuesday (August 6, 2013) meant the Pentagon had to find roughly $1 billion in savings from somewhere else.
And a lot of the savings came from approval from Congress of some reprogramming requests, enabling the department to move money from acquisition accounts, impacting 200 programs.
Defense officials were a little short on specifics in a briefing Tuesday. Speaking on background, they said this: “Sometimes contracts had been delayed. Sometimes we just made a decision [about what] was lower priority.”
Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2013/08/fewer-defense-furloughs-contractors.html
GSA Schedule sales continue to slide
August 5, 2013 by cs
When Tom Sharpe oversaw procurement policy at the Treasury Department, his agency used the General Services Administration supply schedules about as much as most other departments across government do — which, if you ask top GSA officials, isn’t nearly enough.
Last year, about 12 percent of federal procurement dollars that could have gone through GSA actually did. Now, GSA officials say they’re expecting to hit 17 percent by the end of the year. What’s more, they’ve made it clear they’re aiming to hit the 90 percent mark within a decade.
In the face of such lofty goals, GSA schedule sales dipped in 2012 for the second year in a row — 2.9 percent from 2011 and a total 3.5 percent from 2010, according to data compiled for Federal Times by market research firm Deltek.
Keep reading this article at: http://www.federaltimes.com/article/20130731/DEPARTMENTS/307310004/Schedule-sales-continue-slide
NC construction company hit with criminal fraud charges on $89 million US DOT-funded projects
July 29, 2013 by cs
A criminal indictment charging a Monroe-based construction company, its president, and owner and his co-conspirators with government procurement fraud was returned by a grand jury on July 24, 2013 in U.S. District Court, announced Anne M. Tompkins, U.S. Attorney for the Western District of North Carolina.
The 29-count indictment charges Boggs Paving Inc., Carl Andrew Boggs, III (a/k/a Drew Boggs), 49, of Waxhaw, North Carolina; Kevin Hicks, 42, of Monroe, North Carolina; Greg Miller, 59, of Matthews, North Carolina; Greg Tucker, 40, of Oakboro, North Carolina; John Cuthbertson (a/k/a Styx Cuthbertson), 68, of Monroe; and Styx Cuthbertson Trucking Company Inc., of Wingate, North Carolina; with conspiracy to defraud the United States Department of Transportation (USDOT), conspiracy to commit wire fraud, conspiracy to commit mail fraud, money laundering conspiracy, money laundering, and wire fraud for a scheme that lasted more than 10 years and involved more than $87 million in government contracts. All the defendants except Greg Tucker are also charged with mail fraud.
Marlies T. Gonzalez, Special Agent in Charge, U.S. Department of Transportation, Office of Inspector General (DOT-OIG), Region IV; John A. Strong, Special Agent in Charge of the Federal Bureau of Investigation (FBI), Charlotte Division; and Jeannine A. Hammett, Special Agent in Charge of the Internal Revenue Service-Criminal Investigation Division (IRS-CI), join U.S. Attorney Tompkins in making today’s announcement.
According to allegations contained in the indictment, beginning in 2003 and through the present, Boggs Paving Inc. (“Boggs Paving”) fraudulently obtained federally and state funded construction contracts by falsely certifying that a disadvantaged business enterprise (“DBE”) or a small business enterprise (“SBE”) would perform and be paid for portion of the work on such contracts. USDOT’s DBE program provides a vehicle for increasing the participation of disadvantaged business enterprises in federally funded transportation-related projects. The indictment alleges that Styx Cuthbertson Trucking Company Inc. (“Styx”), a road construction hauler based in Monroe, North Carolina, owned by Styx Cuthbertson, was a certified DBE and SBE used by the defendants as a “pass through” entity to obtain such contracts.
To create the illusion that Styx was doing and being paid for the necessary work, the indictment alleges that, among other things, the conspirators ran payments through a nominee bank account in Styx’s name but funneled checks back to Boggs Paving and its affiliates, which were not DBEs or SBEs but were doing the actual work. The indictment further alleges that each time a deposit was made into the nominee account as supposed payment for construction work performed by Styx, a Boggs Paving employee would immediately cut a check from that Styx nominee account to the Boggs entity or another firm that had actually performed the work. In return, according to allegations contained in the indictment, Styx Cuthbertson received a kickback for allowing his name and DBE status to be used by Boggs Paving.
The indictment further alleges that the defendants took careful steps to conceal their fraud. For example, according to allegations contained in the indictment, the defendants made false and misleading statements to both the North and South Carolina Department of Transportation on DBE applications, renewal statements, and certifications. The indictment alleges that the defendants submitted bids purporting to be from Styx when in fact they were from Boggs Paving. The indictment also alleges that the defendants further tried to conceal the fraud by using magnetic decals bearing the “Styx” company logo to cover the “Boggs” logo on company trucks to create the appearance that Styx was the company performing the work. The indictment alleges that Boggs Paving also performed numerous clerical functions in Styx’s name, including creating quotes on Styx letterhead for construction contracts; drafting fraudulent contracts between Boggs Paving and Styx for subcontract work purportedly performed by Styx; creating invoices for work supposedly done by Styx; and giving Styx Cuthbertson pre-prepared documents (including quotes, contracts, and DBE reports) for his signature.
The indictment alleges that from June 2004 through the present, Boggs Paving was the prime contractor on 35 federally funded contracts and was a subcontractor for two additional contracts worth more than $87.6 million. Boggs paving claimed DBE credits of approximately $3.7 million on these contracts for payments purportedly made to Styx. Styx only received payments of approximately $375,432 for actual work on these contracts, all according to the indictment.
The conspiracy charge carries a maximum of five years in prison. Each wire and mail fraud count carries a maximum of 20 years in prison. The money laundering conspiracy charge carries a maximum of 20 years in prison. The money laundering charge carries a maximum of 10 years in prison. Each of the charges also carries a $250,000 fine.
The defendants’ initial appearances in federal court have been set for August 20, 2013.
The charges contained in the indictment are allegations. The defendants are presumed innocent unless and until they have been proven guilty beyond a reasonable doubt in a court of law.
The investigation of the case was handled by DOT-OIG, FBI, and IRS. The case is being prosecuted by Assistant United States Attorney Jenny Sugar of the U.S. Attorney’s Office in Charlotte.
Information on the Charlotte, NC FBI website is posted at http://www.fbi.gov/charlotte/press-releases/2013/monroe-construction-company-and-six-co-conspirators-indicted-for-government-contract-fraud
How bid protests are slowing down procurements
July 24, 2013 by cs
Military procurement already gets a bad rap, the process is slow and inefficient and often wrought with waste and mismanagement. But one of the things that really slows things down is the appeals process for bids.
The number of bid protests has risen dramatically, according to Federal Times. In 2012, the Government Accountability Office received 2,475 bid protests – a 50 percent increase from 2008.
“We build time in our procurement now for protests. We know we are going to get protested,” said Mary Davie, assistant commissioner of the Office of Integrated Technology Services at the General Services Administration.
The problem goes further than that, though. Many companies use bid protests to “force concessions from agencies or the winning companies,” Federal Times reported. Last fiscal year, GAO upheld 106 bid protests, while 941 were settled between the parties.
Read this article at: http://www.federaltimes.com/article/20130721/ACQUISITION03/307210001/How-bid-protests-slowing-down-procurements?odyssey=nav%7Chead
New SBA rule mandates notification if contractors don’t use small business subcontractors
July 22, 2013 by cs
A new rule set to go into effect Aug. 15, 2013 directs prime contractors to notify contracting officers if they don’t use small business subcontractors that were integral to producing a bid proposal.
In the Small Business Administration’s discussion of the final rule, the agency says a prime contractor must represent that it will make a good faith effort to utilize the small business subcontractors used in preparing its bid or proposal.
The rule, authority for which comes from the Small Business Jobs Act of 2010, spells out three conditions of small business involvement in a prime contract bid, any one of which trigger the notification requirement: the prime specifically references a small business in a bid or proposal; the small business has entered into a written agreement with the prime to perform specific work as a subcontractor under the contract should the prime win; or the small business drafted portions of the proposal or submitted pricing or technical information that appears in the bid or proposal.
Keep reading this article at: http://www.fiercegovernment.com/story/new-sba-rule-mandates-notification-if-contractors-dont-use-small-business-s/2013-07-19
GSA launches ‘reverse auction’ platform, encourages small business competition
July 15, 2013 by cs
The U.S. General Services Administration (GSA) announced on July 9, 2013 the launch of a government-managed reverse auction platform— reverseauctions.gsa.gov— available through the National Information Technology Commodity Program (NITCP) of GSA’s Federal Acquisition Service (FAS). GSA expects the platform to deliver increased savings for federal agencies on the most commonly purchased office products, equipment and services, while also making it easier for small businesses to compete for the government’s business.
In a reverse auction, sellers compete to win business from agencies; prices will typically decrease as the competitive auction progresses. GSA’s new reverse auction platform reduces federal agencies’ acquisition processing time and costs, drives prices and costs down, improves transparency and collection of data, and allows for small business set-asides. “Using a government-run reverse auctions tool is a fantastic innovation for GSA’s customers, and we expect that it will drive even more savings and speed into the acquisition process,” said FAS Commissioner Thomas A. Sharpe, Jr. “This approach to government procurement can be used with a good portion of GSA’s Multiple Award Schedules as an efficient and cost-effective process for purchasing commonly used products and simple services. Reverse auctions can drive down prices paid, reduce the total cost of acquisitions, and save time and precious acquisition resources for both government and industry.”
Federal agencies now may use the GSA platform to conduct reverse auctions through select GSA’s Multiple Award Schedules and established select blanket purchase agreements (BPAs) for commodities like office supplies, laptops, tablets and monitors, as well as for simple services like warranty, training and installation. Additionally, the platform will allow federal customers to set aside auctions for small business, increasing opportunities for small and disadvantaged companies to bid easily for government business.
“GSA is doing a lot of exciting and positive things to improve acquisition efficiencies and drive competition, but the new reverse auction platform hits the ball out of the park,” said U.S. Department of the Navy strategic program manager Jamey Halke. Navy is the first agency to use the platform and is already engaged in a partnership with GSA to add the Navy’s BPAs to the platform.
Historically, GSA’s customers have saved as much as 17 percent through use of reverse auctions. With GSA offering front-loaded discounted pricing as a starting point through its BPAs, the reverse auction approach will provide additional savings to the government.
Reverse auctions also provide greater transparency into prices paid which improves the government’s ability to negotiate with vendors to receive best pricing possible. The reverse auction platform also captures line-item data by agency bureau, which will aid agencies in performing prices paid analysis and provide insights into purchasing behavior for strategic sourcing opportunities.
Learn more about the Reverse Auction platform and benefits at http:\\www.reverseauctions.gsa.gov
New rule implements ‘presumption of loss’ over small business misrepresentation
July 12, 2013 by cs
A new rule goes into effect Aug. 27, 2013 implementing a “presumption of loss” of the entire dollar value of any contract given to small businesses that misrepresent their status.
The rule makes the basis of damages for a civil lawsuit equal to the value of the full contract.
The government will consider any misrepresentation to be intentional after a business registers itself as small in any federal database or submits a bid for a contract as a small business.
The rule, which implements provisions from the 2010 Small Business Jobs Act, does limit liability in cases of unintentional error, technical malfunction, “or other similar situations.” The Small Business Administration found 200 firms that misrepresented their size in 2010.
Keep reading this article at: http://www.fiercegovernment.com/story/new-rule-implements-presumption-loss-over-small-business-misrepresentation/2013-07-08?utm_medium=nl&utm_source=internal
DoD steps up contractor performance assessments
July 8, 2013 by cs
The Defense Department has completed significantly more contractor performance assessments in recent years, in terms of both number and percentage, a report from the Government Accountability Office says.
The department completed more than 33,000 performance assessments in fiscal 2012, compared to about 20,000 the previous year and 16,000 the year before that.
As of April 2013, DoD had submitted 74 percent of required assessments, up from 56 percent in October 2011. Required assessments have a period of performance during the prior 3 years and meet the dollar threshold for reporting.
The GAO report, released June 27, credits the improvements to several efforts, including expanded training. In 2012, DoD trained more than 7,000 officials to assess contractor past performance, compared to about 3,600 in 2011 and 3,100 in 2010.
Keep reading this article at: http://www.fiercegovernment.com/story/dod-steps-contractor-performance-assessments/2013-06-28
Federal government again falls short of small business contracting goals
July 3, 2013 by cs
The federal government made progress but again fell short of its small business contracting goals last year, according to government data released Tuesday.
Just 22.25 percent of federal contracting dollars, or $89.9 billion, went to small businesses in fiscal 2012, according to the Small Business Administration (SBA). That’s higher than last year’s 21.65 percent but still shy of the goal of 23 percent set by Congress. It is the 12th consecutive year officials have missed the target.
The government also fell short of its goal for women-owned businesses and firms in economically disadvantaged areas.
Keep reading this article at: http://www.washingtonpost.com/business/on-small-business/government-falls-short-of-small-business-contracting-goals-yet-again/2013/07/02/
Download the SBA report here: download
Read a critique of the SBA report issued by the American Small Business League here: Analysis of SBA Report of Top 100 Small Business Contract Awards FY12 – ASBL