Man gets probation in fraud case involving federal disabled vets program

A Nebraska businessman who pleaded guilty to setting up a company the government said fraudulently landed $25 million in federal contracts intended for companies owned by disabled veterans avoided prison time and major fines Thursday, getting probation instead.

Ram Hingorani, 50, of Omaha, was ordered to serve two years of probation at a sentencing hearing. He had earlier agreed with prosecutors to plead guilty to major program fraud.

Judge Stephanie Rose sentenced him to live at a halfway house in the Omaha area for six months but he will have work release privileges which will allow him to continue to run his construction company.

Rose ordered the government to keep $3.3 million seized from bank accounts held by Hingorani, his family and businesses. No additional restitution or fines were ordered.

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SBA seeks comment on mentor protégé program, small business size rules, government contracting

The U.S. Small Business Administration (SBA) is proposing to amend its regulations to implement provisions of the Small Business Jobs Act of 2010 and the National Defense Authorization Act for Fiscal Year 2013.  Based on authorities provided in these two statutes, the proposed rule would:

  • Establish a Government-wide mentor-protégé program for all small business concerns, consistent with SBA’s mentor-protégé program for participants in SBA’s 8(a) Business Development program.
  • Make minor changes to the mentor-protégé provisions for the 8(a) program in order to make the mentor-protégé rules for each of the programs as consistent as possible.
  • Amend the current joint venture provisions to clarify the conditions for creating and operating joint venture partnerships, including the effect of such partnerships on any mentor-protégé relationships.
  • Make several additional changes to current size, 8(a) Office of Hearings and Appeals and HUBZone regulations, concerning among other things, ownership and control, changes in primary industry, standards of review and interested party status for some appeals.

SBA’s proposed rule, and a discussion of its provisions appears at:!documentDetail;D=SBA-2015-0001-0001.

SBA is seeking comments on the proposed rule, and comments must be received on or before April 6, 2015.


GSA proposes price reporting requirements for Schedule, GWAC and IDIQ contracts; public comment due May 4th

The General Services Administration (GSA) issued a proposed rule on March 4, 2015 that responds to the contracting concept of “category management” introduced December 4, 2014 by the Office of Federal Procurement Policy (OFPP).  The OFPP concept shifts federal purchasing’s focus from managing purchases and prices individually on thousands of procurement actions by dozens of federal agencies to managing categories of purchases across the government.  To implement this concept, GSA’s proposed rule would require vendors on Federal Supply Schedule (FSS), Governmentwide Acquisition Contracts (GWACs) and Governmentwide Indefinite-Delivery, Indefinite-Quality (IDIQ) contracts to report all government transactions, including prices paid.  GSA contends the new rule is needed because the government currently lacks a mechanism that facilitates examination of prices paid by agencies on individual contracts, and this has caused pricing disparities in contracts for similar products and services.

If the proposed rule is adopted, the General Services Administration Acquisition Regulation (GSAR) would be amended to require that vendors report transaction data on individual FSS, GWAC and IDIQ contracts.  Details to be reported include unit of measure, quantity of items sold, universal product codes, prices paid per unit, and total price.  Such contracts accounted for about $39 billion in federal procurements in fiscal year 2014, according to the agency.  GSA says their existing price reduction-related monitoring requirements will be pared back to compensate for the additional reporting burden on contractors.  FSS contracts administered by the Department of Veterans Affairs would be exempt from the new rules.

In introducing the proposed rule, GSA says: “The current lack of transparency on prices paid by government customers has led to significant price variation, sometimes 300 percent or more, for identical purchases by federal agencies from the same commercial vendor as well as the unnecessary duplication of contract vehicles.”

If the proposed rule is finalized, it will go into effect immediately as a pilot program for GWAC and IDIQ contracts.  For FSS contracts, the new rule would be implemented in phases, initially involving only certain products and services in order to test the usefulness of the collected data in eliminating contract duplications and price variations.

The proposed rule also would implement a web-based Common Acquisition Platform (CAP) that GSA says will identify best-in-class contracts, best practices, and similar information.  This online marketplace also would display commercial pricing for similar products.

The proposed rule could be seen to be at odds with recommendations that were first formulated by GSA’s own Multiple Award Schedules Advisory Panel.  In 2009, the MAS Advisory Panel made 20 recommendations on how GSA could improve the Schedules program.  Prominent among the recommendations were the outright removal of the price reduction clause (PRC) from contracts for products and services and establishment of a process for ordering activities to collect and report on their purchasing, including quantity, quality, and price.  Currently, the PRC clause is included in every Schedule contract in an effort to obtain contractors’ best prices.   If contractors do not abide by this contract requirement, they risk having a whistleblower, an inspector general, or the Justice Department filing a complaint or bringing charges pursuant to the False Claims Act.  In addition, GSA presently may request a price reduction at any time during the contract period when their market analysis indicates that lower prices are being offered or paid for the same items under similar conditions.  According to data collected by the Chief Acquisition Officer’s Council, contractors regard the PRC as one of the most complicated and burdensome requirements in federal contracting, and GSA’s own estimates suggest FSS contractors spend over 860,000 hours a year (at a cost of approximately $58.5 million) on compliance with this clause.

Already, there are concerns being voiced that if GSA’s primary motive behind the proposed rule is simply to obtain lower prices, the government runs the risk of losing quality contractors who will not agree to disclose pricing data due to its sensitivity, let alone bear the new cost and administrative burdens associated with disclosure.  While there are differences of opinion among government and business leaders, GSA states that it believes that use of the proposed transactional data reporting clause could be a good alternative to the PRC, contending that the new rule will reduce administrative burden on contractors and have the effect of lowering prices to the government.

In order to sort out the issues and seek public comment, GSA is holding a public meeting and requesting comment on its proposal to amend the GSAR to include clauses that would require vendors to report transactional data from orders and prices paid by ordering activities. Interested parties may offer oral and/or written comments at GSA’s public meeting to be held on Friday, April 17, 2015, beginning at 9:00 a.m. EST.

In addition, as a part of the traditional public comment process that accompanies most proposed federal regulations, GSA is asking interested parties to submit written comments on or before Monday, May 4, 2015 to be considered in the formulation of a final rule.  Comments should be sent to: U.S. General Services Administration, Regulatory Secretariat Division (MVCB), 1800 F Street NW., 2nd Floor, ATTN: Hada Flowers, Washington, DC 20405-0001, citing GSAR Case 2013-G504 in all correspondence. All comments received will be posted without change to, including any personal and/or business confidential information provided.

For the April 17th public meeting, attendees can attend the meeting in person at GSA’s Central Office or virtually through GSA’s Internet meeting platform, Adobe Connect.

  • In-person Attendance: Interested parties may attend the public meeting to be held in the GSA Auditorium at GSA Headquarters, located at 1800 F St. NW., Washington, DC 20405. The public is asked to pre-register by Wednesday April 1, 2015, due to security and seating limitations. To pre-register, use the following link:  On-site registration check-in will begin at 8:00 a.m. EST on Friday, April 17, 2015, and the meeting will start at 9:00 a.m. EST.  Attendees must be prepared to present a form of government issued photo identification.
  • Virtual Attendance: Interested parties may also attend virtually through GSA’s Internet meeting platform, hosted by Adobe Connect. Virtual attendees must register in advance at
  • Oral Public Comments: Parties wishing to make formal oral presentations at the public meeting should indicate so during the registration process. Presentations must be provided to Ms. Dana Munson by electronic mail at no later than Wednesday, April 8, 2015. Time allocations for oral presentations will be limited to fifteen minutes.
  • Written Comments: All formal comments, inluding oral public comments, should be followed-up in writing and submitted to not later than Monday, May 4, 2015.  Reference should be made to GSAR Case 2013-G504.

Industry group wants President to rescind contractor crackdown order

President Obama should rescind an executive order that attempts to crack down on federal contractors who violate labor laws, according to a contracting group,

Stan Soloway, president of the Professional Services Council, called The Fair Pay and Safe Workplaces executive order “unworkable” and detrimental to law-abiding companies while requiring contractors to fulfill an expensive and burdensome new regulatory requirement.

“Companies with pervasive, willful, and repeated violations of law should not be awarded federal contracts,” said Soloway. “However, as constructed, this E.O. is fundamentally unfair, vague, complex and in-executable. It will be costly, burdensome and is simply unnecessary.”

President Obama signed the executive order July 31, which requires federal contractors to disclose any labor law violations made over the last three years and for agencies to take that into account when awarding contracts.

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Approximately 600 small contractors will lose their set-aside status in 2015 — and might not know it

Nearly 600 small businesses will lose a set-aside status in 2015 — and the Small Business Administration isn’t so sure they even realize it yet.

That was among the findings from a report released by the Government Accountability Office Feb. 13 assessing the SBA’s contracting program for small businesses located in designated, highly underutilized business zones, or HUBZones.

Areas are designated as HUBZones based on demographic data including unemployment and poverty rates. The problem, according to the GAO, is the SBA lacks an effective way to communicate program changes to small businesses that participate in the program, which allows them to bid on contracts set aside for small businesses located in HUBZones. And because areas can lose their qualifying status due to changes in economic conditions, resulting in a three-year transition period before the status is stripped entirely, communication with participating small businesses is crucial.

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Reforms to IGs, acquisition, FOIA included in POGO’s ‘Baker’s Dozen’ of congressional priorities

The Project on Government Oversight (POGO) outlined 13 congressional priorities that would make the federal government more transparent, accountable and ethical in a new report.

POGO’s 2015 “Baker’s Dozen” includes areas for legislative reform as well as issues that would benefit from improved oversight, according to the Feb. 11 report.

Near the top of the group’s list is a call to make agency inspectors general more independent and accountable. POGO asks Congress to use legislation to clarify IG authorities and access to agency records, quickly fill IG vacancies and require more thorough responses from agencies on reports. The organization also calls out the Justice Department in particular, asking that the DOJ IG be given more authority to investigate misconduct by DOJ attorneys.

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San Antonio businessman sentenced in VA contract fraud

San Antonio 71-year-old Jonathan Patrick Saunders, president of Saunders MEP, Inc., was sentenced last week to one year and one day in federal prison followed by three years of supervised release and ordered to pay $1,494,000 restitution for defrauding the Department of Veterans Administration (VA) in connection with architectural and engineering contracts.

Justice Dept. sealOn January 6, 2015, Saunders pleaded guilty to one count of wire fraud.  By pleading guilty, Saunders admitted that over a period of five years beginning in March 2008, he knowingly provided fraudulent information to the VA in order to obtain up to $2 million in task orders from the VA for projects to be performed in and around San Antonio.

On Feb. 19, 2015, United States District Judge Orlando Garcia found that Saunders made false representations to the VA.  In his SF-330 “Architect-Engineer Qualifications” package, Saunders falsely represented that his business qualified as a Service Disabled Veteran Owned Small Business, that certain persons with particular qualifications worked for his firm, and that certain projects were completed by his firm.  Saunders used interstate wires to execute his fraud scheme.

This case was investigated by agents with the Office of Inspector Generals from the VA and the Small Business Administration.  Assistant United States Attorney Thomas P. Moore prosecuted this case on behalf of the Government.


Contractor whistleblowers proposed to be covered in new regulation

The U.S. Office of Special Counsel (OSC) has issued a notice of proposed rulemaking (NPR) to revise its regulations to accept covered disclosures of wrongdoing from employees working under a contract or grant with the Federal government, 80 Fed. Reg. 3182.

The proposed rule can be seen at:

Comments on the proposed rule are due March 23, 2015.


Attention ‘agile’ contractors: Come show and tell for 18F

The Obama administration has ambitious plans to embed a full-scale digital-service team within each agency to help overhaul the way government delivers IT projects.

But the teams won’t do it alone.

Officials at the General Services Administration (GSA) and its in-house digital shop 18F are now sending a message to the traditional contracting industry: We need your help, too.

That was the takeaway from the February 3, 2015 joint GSA-18F industry day where officials and industry representatives mulled over plans for a new agile-only contracting vehicle that will eventually help agencies purchase services specifically from companies that specialize in quick-turnaround software deployments

18F has been doing its part over the past year to help agencies revamp citizen-facing services. All told, the office has agreements with about 18 agencies to perform development and design work, officials said.

The relatively small shop — its staff size currently hovers around 100 — has faced “explosive” demand for its services and can’t keep up, said Greg Godbout, 18F’s executive director.

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FAR prohibitions on human trafficking take effect Mar. 2, 2015

The Federal Acquisition Regulation (FAR) Council has published the a  final rule implementing Executive Order 13627 and title XVII of the National Defense Authorization Act of 2013, requiring contractors on federal contracts to certify, both prior to award and annually, their human trafficking compliance and monitoring.  The Final Rule prohibits contractors from:

  • engaging in severe forms of human trafficking during the period of performance of the contract,
  • procuring commercial sex acts during the period of performance of the contract,
  • using forced labor in the performance of the contract,
  • destroying, concealing, confiscating or otherwise denying employees’ access to identity or immigration documents,
  • engaging in fraudulent or misleading recruitment practices,
  • employing recruiters that violate the labor laws of the country where the recruitment takes place,
  • charging recruiting fees,
  • failing to provide return transportation to an employee who is not a national of the country where the work is to take place, subject to limited exceptions,
  • providing housing, if required, that fails to meet host country safety or housing laws, and
  • failing to provide a written work document, if required.

The Final Rule is broadly applicable to all Federal contractors and subcontractors, regardless of contract type or dollar amount, including contractors providing commercial items, commercially-available off-the-shelf items, or goods on General Service Administration (GSA) Federal Supply Schedules (FSS).  In addition, certain contractors providing goods and services abroad will be required to make new certifications and implement compliance plans.  Failure to comply may result in financial penalties, termination for default, suspension or debarment, and potential litigation, including false claims suits.

This Final Rule will be effective on March 2, 2015.  The FAR Council has recommended that Contracting Officers to include the Final Rule in Indefinite Delivery/Indefinite Quantity (IDIQ) contracts with task orders remaining after March 2 through bilateral modification, so both new and existing contracts will be subject to the Final Rule after that date.

To supplement and implement the new FAR provisions in Department of Defense (DoD) contracts, DoD is issuing a final rule in the form of its Defense Federal Acquisition Regulation Supplement (DFARS) at Subpart 252.235-7004.  In addition, DoD Procedures, Guidance and Information (PGI) can be found at PGI 222.17.  Included is a sample checklist for auditing compliance: CTIPs_Audit_Checklist_10_May_2011.