DoD CIO to industry: Do your homework

Defense Department Chief Information Officer Terry Halvorsen said that a recent trip to Silicon Valley reinforced the fact that the department will be looking to industry to drive innovation for the nation’s military. Not only will a closer partnership require DoD to move more quickly, it will require vendors to better understand DoD’s needs, he said.

US DoD logoHalvorsen said DoD will have to speed up acquisitions if it wants to work with some of the up-and-coming companies that work in a venture capital environment.

“Six months is a really long time for them,” said Halvorsen July 9 at the DoD CIO Mobility Industry Day, hosted by AFCEA’s Washington, D.C. chapter

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Can small, innovative companies break into D.C. contracting scene?

Sharath Mekala’s two-person tech startup isn’t a textbook government contractor.

Village Defense, spawned through a startup incubator called 1776, develops a free app that lets neighbors send real-time alerts to one another if they notice suspicious activity. A premium version, which costs $125 a month, is designed for homeowners associations.

technologyA Washington area native, Mekala recently uprooted from Atlanta and returned to D.C., in part to market Village Defense to behemoth potential customers: the Defense Department, the Federal Emergency Management Agency, and the Education Department. He says President Obama’s public safety initiative, which includes a blueprint for improved community policing, creates an opportunity for apps like Village Defense.

“I think the government is trying to keep up with [technology]… earlier on you’d have to push your way in,” Mekala says.

Federal procurement, once largely unapproachable by startups, could be transforming to let small, creative tech companies in.

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This story appears in the July-August issue of Government Executive magazine. 

Ban on contractor campaign gifts is Constitutional, says circuit court

A 75-year-old prohibition on campaign contributions by individual federal contractors was upheld on Tuesday by a three-judge panel of the District of Columbia Circuit, a ruling favoring the Federal Election Commission’s position over two contractors for the U.S. Agency for International Development (USAID).

FederalElectionCommissionIn Wagner v. FEC, the appeals judges meeting en banc determined that the government has an interest in such a ban to “prevent corruption and the appearance thereof and, in so doing, to protect the integrity of the electoral system by ensuring that federal contracts were awarded based on merit.”

Plaintiffs Lawrence Brown and Jan Miller, longtime USAID employees who left and were hired back to write a report on science and regulation, wanted to exercise their free speech rights and give money to candidates, political parties and traditional political action committees in the 2012 elections. They cited the First Amendment, equal protection and due process.

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Owners of phony disadvantaged business to pay $7.8 million to settle false claim allegations

LB&B Associates Inc. and its principals, Lily A. Brandon and F. Edward Brandon, have agreed to pay the government $7.8 million to resolve allegations that they made false statements to obtain contracts through the Small Business Administration’s (SBA’s) 8(a) Business Development Program for Small Disadvantaged Businesses, the Justice Department announced July 6, 2015.   LB&B is a North Carolina corporation headquartered in Columbia, Maryland.

Justice Dept. seal“The purpose of the 8(a) Program is to assist small disadvantaged businesses to compete in the American economy,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Department of Justice’s Civil Division.  “The Justice Department is committed to making sure that those who participate in 8(a) contracts do so honestly and fairly.”

“The basic purpose of this federal program is undermined when contractors falsely claim to be a small or disadvantaged business,” said Acting U.S. Attorney Vincent H. Cohen Jr. of the District of Columbia.  “This $7.8 million settlement demonstrates our commitment to protecting the integrity of this important program.  Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.”

The government alleged that in seeking certification under SBA’s 8(a) Program, LB&B falsely represented that Lily Brandon – who satisfied the criteria for a socially and economically disadvantaged person under the program – controlled the operations of LB&B, when she did not.  Securing 8(a) certification allowed LB&B to obtain 8(a) set aside contracts from various government agencies.  Throughout the performance of these contracts, Lily Brandon allegedly failed to exercise actual control over LB&B’s operations, a key component to qualifying for the set aside contracts.

“This case shows the lengths we will go to protect the integrity of SBA’s 8(a) program,” said General Counsel Melvin F. Williams Jr. of the SBA.  “Both the Justice Department and SBA are prepared to do what it takes to make certain that the program helps folks who are really disadvantaged, and for whom it is intended to assist.”

The civil settlement resolves a lawsuit filed by Steven O. Sansbury and James T. Buechler, former employees of LB&B, under the whistleblower provision of the False Claims Act, which permits private parties, known as relators, to file suit on behalf of the government for false claims and to share in any recovery.  The act permits the government either to intervene in and take over the whistleblowers’ suit, or to allow the whistleblowers to pursue the action.  In addition to alleging LB&B’s improper receipt of 8(a) set aside contracts, Mr. Sansbury and Mr. Buechler alleged that LB&B made false claims in connection with contracts it obtained pursuant to the SBA’s Mentor-Protégé Program, which allows participants to obtain set aside contracts following LB&B’s graduation from the 8(a) Program.  The United States intervened in the whistleblowers’ 8(a) claims but not the Mentor-Protégé claims.  The settlement resolves both claims, and Mr. Sansbury and Mr. Buechler will recover a total of $1.5 million of the settlement.

The settlement with LB&B was the result of a coordinated effort among the Civil Division, the U.S. Attorney’s Office of the District of Columbia, the SBA’s Office of Inspector General and SBA’s Office of General Counsel.

The civil lawsuit was filed in the District of Columbia and is captioned United States ex rel. Sansbury, et al.  v. LB&B Associates, Inc., et al., No. 07-cv-00251 (D. D.C.).

The claims resolved by this settlement are allegations only, and there has been no determination of liability.


Georgia purchasing office announces ‘convenience contract’ for purchase of autos made in state

In support of the Automobiles Manufactured in Georgia Initiative program, the Georgia Department of Administrative Services (DOAS), State Purchasing Division, has announced the implementation of a new statewide contract for Automobiles Manufactured in Georgia.

GA DOASThe contract number is 99999-001-SPD0000122.  This is a “convenience contract” and is available for use by all State, City & County public entities within the State of Georgia. The contract term is from July 1, 2015 through June 30, 2025. Users of this contract may purchase using their P-Cards.

This contract is currently established within Team Georgia Marketplace™. Contract information, including the Information Sheet, Benefit Sheet and Ordering Instructions, can be found on the Supplier’s Contract Summary Page located within Team Georgia Marketplace™.

Questions may be submitted to the issuing officer, Billy Gilbert, at or 404-657-4277.

Wife of DoD employee and subcontractor conspire to fraudulently obtain over $750,000 in Aberdeen Proving Ground contracts

Sandra Nixon, a/k/a “Lisa Hart,” age 52, of Silver Spring, Maryland, and Kenneth Dawson, age 52, of Niceville, Florida, pleaded guilty on Tuesday, June 30, 2015, to conspiring to defraud the United States.

The guilty pleas were announced by United States Attorney for the District of Maryland Rod J. Rosenstein; Frank Robey, Director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit; Special Agent in Charge Robert Craig of the Defense Criminal Investigative Service – Mid-Atlantic Field Office; and Special Agent in Charge Stephen E. Vogt of the Federal Bureau of Investigation.

DCIS“Ms. Nixon and Mr. Dawson unlawfully manipulated the federal contracting process, a system the public expects to be fair and transparent, and that the Defense Department relies upon to support our men and women in uniform,” said Robert Craig, Special Agent in Charge for the DCIS, Mid-Atlantic Field Office.  “The Defense Criminal Investigative Service, its law enforcement partners, and the U.S. Attorney’s Office are committed to maintaining the integrity of the contracting process through the identification and investigation of those alleged to have abused it.”

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Government small business data includes billions to Fortune 500 firms

An analysis by the American Small Business League (ASBL) has uncovered 179 Fortune 500 firms and their subsidiaries received federal small business contracts in fiscal year 2014. The study was based on the most recent information available from the Federal Procurement Data System (FPDS).

The largest recipient of federal small business contracts was Verizon. Some of the other firms that received federal small business contracts in recent years include: Chevron, Apple, General Electric, AT&T, CVS, Hewlett Packard, UPS, Bank of America, Home Depot, Target, Microsoft, Wells Fargo, Pepsi, Coca-Cola, Boeing, Oracle, Raytheon, Lockheed Martin, General Dynamics, Northrop Grumman, Honeywell International, BAE Systems, Rolls-Royce, Sears and John Deere.

The ASBL research is consistent with the recent investigative report released by Public Citizen titled “Slighted: Accounting Tricks Create False Impression That Small Businesses Are Getting Their Share of Federal Procurement Money, and the Political Factors That Might Be at Play.”

ABC, CBS, NBC, CNN, CNBC, MSNBC, Fox News and RTTV along with dozens of stories in many of the largest newspapers in the country have all reported on the fraud and abuse in federal small business contracting programs.

As early as 2003, the Government Accountability Office uncovered over 5,300 large businesses were receiving federal small business contracts.

On June 26, the Pentagon and the SBA ignored the results of the May 6 Public Citizen report and held a joint meeting to claim 24.99 percent of all federal contracts were awarded to small businesses. Billions in contracts to Fortune 500 firms and their subsidiaries were included in that number.

sba-logoThe research by ASBL, Public Citizen and federal investigators has found the SBA’s data to be significantly inflated in two ways. The SBA uses a rule they fabricated called the “exclusionary rule” to use a much lower federal acquisition budget in calculating the percentage of awards to small businesses. The SBA also unlawfully created a “five year rule” to include billions of dollars in contracts to Fortune 500 companies and their subsidiaries in their small business data.

Both the “exclusionary rule” and the “five year rule” have no basis in law and are in direct conflict with the provisions of the Small Business Act. The Small Business Act defines a small business as having no more than 1500 employees and requires small businesses receive “not less than 23 percent of the total value of all prime contract awards for each fiscal year.

The House Small Business Committee unanimously adopted an amendment to call for a new GAO investigation into fraud in federal small business contracting programs, based on research done by Chapman’s ASBL.

Senate Small Business Committee Chairman, David Vitter, has demanded that SBA Administrator Maria Contreras-Sweet provide him with a complete list of all firms that received federal small business contacts in fiscal year 2014 for an upcoming hearing on the issue.


NIST issues guidance on contractor cybersecurity standards for controlled unclassified information

On June 19, 2015, the National Institute of Standards and Technology (“NIST”) published the final version of guidance for federal agencies to ensure sensitive information remains confidential when stored outside of federal systems.

NIST Pub 800-171The guidelines, Special Publication 800-171, Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations, apply to nonfederal information systems and organizations that process, store, or transmit federal controlled unclassified information (CUI) and match the guidelines published for public comment last fall.

The new guidance is step two in a three-part plan with the National Archives and Records Administration (NARA) to ensure the confidentiality of sensitive federal information no matter where it is stored.  As data breaches continue to make near-daily news, federal contractors not using the “recommendations” laid out in SP 800-171 would be wise to take another look, as they contain, more than ever, the Government’s express expectations of how it wants its information protected.

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120,652 IT products, worth $14.7 billion, bought through NASA’s SEWP contract

If you sell hardware, software and related IT commodities to the U.S. government, then you know all about Solutions for Enterprise-Wide Procurement, or SEWP, a multiple-award contract through which agencies buy more than $2 billion a year in tech goods and gear.

Since most SEWP purchases are through value-added resellers, it can be tricky to figure out what exactly agencies are buying. Unless you use BGOV.

Here’s a word cloud, generated at using data compiled by BGOV, that takes summaries of 120,652 transactions totaling $14.7 billion on SEWP IV and condenses the information into one graphic that tells the contract’s story.


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Securing federal data on nonfederal systems

The National Institute of Standards and Technology (NIST) has issued new guidance aimed at protecting federal data that’s stored on information systems outside the federal government.

NISTSpecial Publication 800-171, Protecting Controlled Unclassified Information in Nonfederal Information Systems and Organizations, applies to information systems and organizations outside of the federal government that process, store or transmit federal controlled unclassified information, or CUI.

CUI is any information that the federal government requires to be safeguarded by security and/or privacy controls, excluding information that is deemed classified, which is protected under a different set of regulations.

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