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

Driving the federal government towards a ‘Low Price Regardless’ contracting model

December 9, 2014 by

As part of the Federal Strategic Sourcing Initiative (FSSI), the Office of Management and Budget (OMB) and the General Services Administration (GSA) have created a Prices Paid Portal. The goal of the Prices Paid tool is to reduce total cost of ownership for goods and services by providing greater visibility on the prices agencies have paid for them.

The Prices Paid Portal is part of an ongoing effort to collect transactional data across the government. The challenge in managing pricing data is to ensure it is used to identify contracting strategies and/or terms (like volume commitments) that increase competition and deliver greater value to the American people. Unfortunately, current data management practices will likely reduce competition and value over the long term.

Sound management of pricing and procurement data requires discipline, sophistication, and, most significantly, an understanding of markets and how companies respond to competitive dynamics. Moreover, price alone is incomplete data. In order to effectively understand pricing, one must have access to and understand the underlying terms and conditions, contract commitments, market and economic forces that drive pricing. Price is only one data point in determining “total cost of ownership.” An accurate measure of “total cost of ownership” includes much more than just price. It also includes acquisition cost (i.e. how much did it cost to conduct the procurement), operational costs, maintenance costs, and disposal costs. The emphasis solely on prices paid data ignores these fundamental cost elements.

Keep reading this article at: http://www.federaltimes.com/article/20141201/BLG06/312010013

VA awards new veteran-owned small business program management contract — spurring another lawsuit

December 8, 2014 by

Spurred by a protest in a federal court, the Department of Veteran Affairs picked a new company to manage the process of getting veteran-owned small businesses verified. The result? Another lawsuit from the prior winner that saw its contract terminated.

It’s the latest in something of a contracting debacle for the department, which has left the management of its Center for Veterans Enterprise in a state of flux for more than a year.

The VA decided to award to the $39.9 million contract to manage its Center for Veterans Enterprise to Loch Harbour Group Inc. of Alexandria. The bulk of that work is for processing contractor applications to be verified as veteran-owned, which in turn allows them to be able to compete for work set aside by the VA. That contract was originally awarded to Monterey Consultants Inc. of Dayton, Ohio, but terminated in November when the VA opted to take corrective action in response to a protest filed by Loch Harbour in the U.S. Court of Federal Claims.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/12/va-awards-new-veteran-owned-small-business-program.html?page=all

GAO sustains protest resulting from agency’s failure to make referral to SBA

December 5, 2014 by

A procuring agency erred by essentially assigning a small business a failing past performance score without referring the matter to the SBA.

In a recent bid protest decision, the GAO held that the assignment of a failing past performance score under a past/fail system constituted a non-responsibility determination–and that the SBA was entitled to review the agency’s determination under the SBA’s Certificate of Competency procedures.

The GAO’s decision in FitNet Purchasing Alliance, B-410263 (Nov. 26, 2014) involved a Bureau of Indian Affairs solicitation for gym floor racks, covers, and accessories.  The solicitation was posted on the FedBid reverse auction website and was set aside for small businesses.

FitNet Purchasing Alliance submitted the lowest price.  However, the Contracting Officer elected to make award to the second-lowest bidder, Nationwide Supplies.  A single-page document in the agency’s file stated that the Contracting Officer had declined FitNet’s bid because of adverse past performance information about FitNet.  The agency’s file did not mention Nationwide’s past performance, or indicate that the Contracting Officer had considered Nationwide’s past performance in making the award decision.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/agency-doesnt-request-sba-coc-gao-sustains-protest/

 

Former CEO of defense contractor pleads guilty to bribery

December 4, 2014 by

The former chief executive of a Northern Virginia defense contractor pleaded guilty to a federal charge of providing gratuities to a federal contracting official, and the company agreed to pay a $300,000 fine for its involvement in the bid-rigging scheme, the Justice Department said Tuesday.

Harry Martin, who stepped down as the head of Intelligent Decisions last month, pleaded guilty to charges that he and other company officials paid illegal gratuities to an Army procurement official based in South Korea, spending more than $10,000 on dinners and golf outings and, in one case, agreeing to spend more than $30,000 on a Lexus ES350 for the official to use, according to the department.

In return, the company received lucrative contracts from the official, identified as Seon Lim, and preferential treatment on Army subcontracts worth up to $4 million.

Keep reading this article at: http://www.washingtonpost.com/business/capitalbusiness/former-intelligent-decisions-ceo-pleads-guilty-to-bribery-charges/2014/11/25/f3ae43d0-74c1-11e4-bd1b-03009bd3e984_story.html

Comments due Jan. 15 on draft GSA Schedule 70 SIN

December 3, 2014 by

On the heels of an industry day held on Nov. 18, 2014, the General Services Administration (GSA) released a working draft of terms and conditions for adding a Special Item Number (SIN) to IT Schedule 70 specifically for cloud services.

The agency is asking the private sector and other stakeholders to review the draft document and submit feedback as they get closer to creating the new SIN, likely in the spring of 2015.

Specifically, GSA is looking for comment on six questions.

Keep reading this article at: http://www.federaltimes.com/article/20141121/ACQ/311210009/Draft-terms-released-cloud-SIN

VA cancels contract award for management of its veteran-owned small business program

December 2, 2014 by

Once again, the Department of Veteran Affairs is trying to figure out what company will manage the process of getting veteran-owned small businesses verified.

CVE logoThe agency decided to rescind its September $39.9 million contract award to Monterey Consultants Inc. of Dayton, Ohio, to manage its Center for Veterans Enterprise (CVE). That award, the bulk of which was for processing contractor applications to be verified as veteran-owned, which in turn allows them to be able to compete for work set aside by the VA, was protested in September by Loch Harbour Group Inc. of Alexandria.

The VA confirmed in a Nov. 18 court filing that the VA would re-evaluate Loch Harbour’s proposal to determine whether the company qualified for the award. Monterey will no longer be eligible for re-award of the contract, according to the filing, though Monterey executives said that the company is submitting additional information to the VA to counter the protest allegations in hopes that the agency reconsiders its decision.

Keep reading this article at: http://www.bizjournals.com/washington/blog/fedbiz_daily/2014/11/back-to-the-drawing-board-va-cancels-its-contract.html

NY firm pays $2.72 million to settle bid-rigging and kickback charges

November 28, 2014 by

Sevenson Environmental Services Inc., an environmental remediation firm based in Niagara Falls, New York, has agreed to pay more than $2.72 million to resolve allegations that it violated the False Claims Act and the Anti-Kickback Act by accepting kickbacks, rigging bids and passing inflated charges to the U.S. Environmental Protection Agency (EPA) in connection with work performed at the Federal Creosote Superfund Site in Manville, New Jersey, the Department of Justice announced Nov. 17, 2014.  Sevenson was the prime contractor responsible for the cleanup of the Federal Creosote Site, which was funded by the EPA.

“The integrity of the public procurement process is severely undermined when federal contractors engage in anticompetitive contracting practices for their own personal gain,” said Acting Deputy Assistant Attorney General August E. Flentje for the Department of Justice’s Civil Division.  “The Department of Justice will hold those accountable who abuse their positions at the public’s expense.”

“EPA is vigilant to ensure that the type of fraud perpetrated by Sevenson employees at Federal Creosote is not tolerated and that federal funds are recovered,” said EPA Regional Administrator Judith A. Enck.

The settlement resolves allegations that Sevenson solicited and accepted more than $1.6 million in kickbacks from six companies in exchange for the award of subcontracts for work at the Federal Creosote Site.  It also resolves allegations that Sevenson conspired with the subcontractors to pass the majority of those kickbacks to the EPA and that it conspired with one subcontractor to pass to the EPA additional inflated charges for soil disposal.

This case was handled by the Civil Division’s Commercial Litigation Branch, with assistance from the New York Field Office of the department’s Antitrust Division, the EPA Region 2, the EPA’s Office of the General Counsel and the Kansas City District of the U.S. Army Corps of Engineers.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.

Source: http://www.justice.gov/opa/pr/sevenson-environmental-services-inc-agrees-pay-272-million-settle-claims-alleged-bid-rigging