Big businesses winning contracts meant for small ones, groups charge
April 12, 2010 by cs
A new skirmish is emerging in an ugly, ongoing dispute between small business advocates and the federal government over its past — and perhaps continuing — practice of awarding small business contracts to Fortune 500 companies.
The American Small Business League in a lawsuit is accusing the General Services Administration of destroying information in a database that could help advocates trace the violations, and the league has asked a federal court in Northern California to force the government to restore the data, which spans 10 years, and to make the information public. A federal judge is set to decide on the request for a preliminary injunction by the end of April.
For years, the Petaluma, Calif.-based organization, which represents 100,000 businesses seeking federal contracts, has tried to hold the government accountable for federal regulations that require 23 percent of its contracts to be set aside for small businesses. The government has never met that goal, small business advocates say. Instead, many contracts have been awarded to companies such as Falls Church-based General Dynamics, Xerox and General Electric, advocates say, withholding billions of dollars annually from small businesses.
“I believe $10 billion a month in federal contracts that by law should be going to small businesses are actually going to Fortune 500 firms and to some of the biggest companies around the world,” said Lloyd Chapman, president of the ASBL.
“It’s devastating to small businesses,” Chapman said, adding that he’s talked with several that have closed because they couldn’t get contracts.
A spokeswoman for the GSA said her agency could not comment on the lawsuit.
At issue is whether large businesses deliberately defrauded the government and should be punished, as the advocates argue. The Small Business Administration denied that the contracts went to large companies intentionally. A spokesman said the awards resulted from a number of problems: companies mistakenly applying for contracts because they were unaware of the complex guidelines of what constitutes a small business; data entry errors; and agencies failing to update records after large companies, including General Dynamics, bought small businesses that earlier had received contracts.
“In nearly all the cases, it’s a data integrity issue, not awarding the contract falsely,” said SBA spokesman Jonathan Swain. “The integrity of this data is a top priority” for SBA Administrator Karen Mills.
The dispute centers on the government’s move last month to drop a field from its database that captured companies that identified themselves as small businesses. Advocates say they used that field to determine whether large companies had illegally misidentified themselves as small businesses to get the contracts. Companies that falsely represent themselves are subject to fines of up to $500,000 or a prison term of up to 10 years, though the government has rarely if ever imposed the penalties, advocates say.
A study issued by the SBA’s inspector general in February said 11 of 36 contracts it sampled were awarded to businesses reported “as small, but the contract file reflected that they were other than small.”
“We really don’t know how much business we’re looking at” that was lost, said Fred Valerino Sr., director and founder of Pevco, a 70-employee Baltimore company that sells pneumatic tubes, similar to the devices used in drive-through bank windows, that allow government hospitals to send items from one end of their building to another.
Valerino said government audits show that his competitor, a Swiss multinational corporation, received 147 sole-source contracts from the government that were destined for small businesses. “All we’re looking for is a fair share of the industry,” he added.
Last year, the SBA reported that the government had set a record in 2008 awarding federal contracts to small businesses. However, it said only 21.5 percent of the contracts went to these firms, still below the 23 percent requirement. Advocacy groups such as the National Association of Small Business Contractors said the shortfall represented $30 billion in lost revenue to the firms.
Swain of the SBA in part faulted an overwhelming crush of contracting transactions — 8 million — that government officials oversee each year. He said the government is training contracting officers to look for errors and increase quality control.
“We are periodically running anomaly reports to identify any contracts that are coded as having gone to a small business that might look questionable,” Swain said. “We’re sending those reports to the procurement officer in the agency that specifically awarded the contract to reconfirm the data.”
-by V. Dion Haynes, Washington Post Staff Writer – Monday, April 12, 2010; A15
2010′s Top 10 contracts (so far)
April 10, 2010 by cs
From huge multiple award contracts to significant awards to single winners, we look at the largest contract awards announced during the first three months of 2010.
Contracts announced during January, February and March had values that ranged from $266 million to $2.8 billion.
Our rankings are based on the ceiling value of the contract, and not the actual value of any work performed to date.
Readers are expected to supply their own drum roll and Lettermanesque quips, so on with the countdown…
No. 10. General Atomics wins Air Force UAS support contract
General Atomics Aeronautical Systems Inc. won a $266 million contract for program and technical support for the MQ-1 Predator and MQ-9 Reaper unmanned aerial systems.
Work will include program and configuration management, logistics, technical services, flight and operations, software maintenance and data collection.
General Atomics also will handle urgent and depot repairs, inventory control and spare part management.
9. SAIC captures $351M Navy contract for technical and engineering support
Under a five-year, $351 million Navy contract, Science Applications International Corp. will support the Naval Surface Warfare Center-Crane Division and the Joint Special Operations Response Department.
The department provides the Defense and Homeland Security departments with training and support involving sensors, communications, mobility and special munitions and weapons.
8. General Dynamics wins $387M Army contract
General Dynamics Corp. will provide a variety of technical support and training advisory services to the Army under a five-year contract that could be worth as much as $387 million.
The Army’s Program Executive Office for Simulation, Training and Instrumentation, needs technical, management and professional engineering support services for the procurement and fielding of constructive training systems.
Services to be performed by General Dynamics consist of engineering, integration, exercise and experimentation support; gaming, materiel purchases, maintenance, supply support and post-fielding support.
7. CGI Federal wins $395M follow-on State Department contract
Under a $395 million, 10-year blanket purchasing agreement, CGI Federal Inc. will provide systems integration and consulting services and support for more than 5,000 State Department and U.S. Agency for International Development users of the Joint Financial Management System at more than 300 posts and missions around the world.
CGI has three goals under the contract – modernize systems, provide business information and financial data and lower the total cost of ownership for its customers.
6. SRA wins $500M contract to modernize farm programs
SRA International will work with the Agriculture Department under a $500 million contract to help the agency modernize the technology and business processes it uses to serve farmers across the country.
The Application Transformation and Modernization Systems Integrator blanket purchase agreement was awarded through the General Services Administration schedule and will tap into Recovery Act funds.
The contract will be used to modernize how farm benefit programs and services are delivered. Goals include streamlining business processes, rapidly implementing new farm programs, modernizing technology platforms, and improving access and convenience for producers, ranchers and farmers.
5. SAIC secures $625M Navy award
Science Applications International Corp. won a $625 million contract from the Navy’s Program Executive Office of Command, Control, Communications, Computers and Intelligence. The contract calls for the company to develop software as well as modify and enhance existing C2 systems.
SAIC will provide software engineering, design, development, integration and modification, as well as test and evaluation services. The company also will provide integrated logistics support, and configuration and program management services as required, SAIC said in a statement.
4. Raytheon wins $886M award to boost GPS accuracy
Raytheon Co. has won a contract from the Air Force worth $886 million to develop a new element of the Global Positioning System that will improve the accuracy of information from GPS satellites.
The contract is the first of two development blocks of the advanced control segment (OCX), which should have a significant effect on GPS capabilities.
The OCX system will include anti-jam capabilities and improved security, accuracy and reliability and will be based on a modern service-oriented architecture to integrate government and industry open-system standards.
3. Lockheed scores $940M anti-IED award/p>
Lockheed Martin Corp. will produce Improvised Explosive Device jammers for the Navy under a indefinite-delivery, indefinite-quantity contract that has a ceiling value of $940 million.
In the first task order, Lockheed will build Symphony Radio Controlled Improvised Explosive Device Defeat jammer systems. The Symphony systems are approved by the U.S. government for sale through the Foreign Military Sales program to allied, coalition and partner nations for operations in Iraq, Afghanistan and in other nations.
Symphony is programmable and designed for easy installation, operation and maintenance on diverse platforms used by security forces worldwide. It also is compatible and interoperable with other communications systems and jamming devices, the statement said.
2. Lockheed, Northrop win CANES contracts worth nearly $1B
Defense contracting giants Northrop Grumman Corp. and Lockheed Martin Corp. will assist the Navy with its Consolidated Afloat Networks and Enterprise Services program known as CANES. Each won separate contracts. Lockheed Martin’s has a ceiling of $937 million and Northrop’s is worth $775 million.
The contract is designed to streamline and consolidate Navy information technology networks aboard its ships, and will help the Navy deploy new technologies.
The Navy wants next-generation command and control systems and wants to integrate shipboard servers, workstations, and networking systems with the Navy’s shore-based Next Generation Enterprise Network (NGEN) and the naval portion of the Global Information Grid.
1. CSC, Stanley share $2.8B State Department contract
Computer Sciences Corp. and Stanley Inc. each won a prime contract to run non-immigrant visa application processing for the State Department. The Global Services Strategy contract is worth $2.8 billion over 10 years and the two companies will compete for task orders for work around the world.
The contract builds off a pilot program CSC ran in Mexico to process non-immigrant visa applications. Non-immigrant visas are for tourists, business visitors, students and others who wish to come to the United States, but aren’t planning to become immigrants.
During 2008, 8 million visa applications were processed, according to an industry source close to the competition.
By Nick Wakeman – Washington Technology – Apr. 09, 2010 – About the Author: Nick Wakeman is the editor of Washington Technology.
Audit Blames OMB’s Lack of Guidance for Shoddy Contracting Data
March 17, 2010 by cs
By Emily Long 03/15/10 – NextGov.com -
The Office of Management and Budget has improved the transparency of federal spending but has limited tools to improve data quality and mandate agency compliance, according to observers.
Nextgov on March 12 reported that a Government Accountability Office audit found missing and inconsistent data on USAspending.gov, the federal contract awards database. The report blamed a lack of guidance from OMB for the incomplete and erroneous information.
One problem is the data is difficult to work with, a concern that extends beyond USAspending.gov, said Bill Allison, an analyst at the nonprofit Sunlight Foundation. There are enough “garbage in-garbage out” databases, and it’s difficult to accurately assess performance using shoddy data, he added.
According to the report, OMB has yet to issue specific guidance on how agencies should fill in required data fields and validate the information submitted to USAspending.gov. Spokesman Tom Gavin said OMB expects to release a plan for collecting, reporting and posting data this spring and also will relaunch the Web site with better navigation and search capabilities.
GAO also found that OMB has no system in place for mandating compliance and has relied on agencies to voluntarily submit award information. OMB wouldn’t identify specific steps for holding agencies accountable for complete and accurate reporting, saying only that officials will be aggressive in working with agency leaders to meet goals. In keeping with President Obama’s open government directive, agencies have designated a senior official accountable for the quality and standardization of all federal spending data.
“If you say, for example, restrict funding, that doesn’t help you get to your goal of getting agencies to comply,” said Craig Jennings, director of federal fiscal policy at the nonprofit OMB Watch, adding the government has few punitive options in dealing with delinquent agencies.
Allison agreed that censuring agencies could result in less data being made public. He said one strategy would be to create a career track to reward agency personnel who build transparency effectively.
“It’s one of the biggest problems the transparency community has,” he said. “Plenty of carrots, but what kinds of sticks?”
GAO’s audit also found that OMB so far has not included subcontractor award data on the USAspending.gov site, which was required by January 2009. The agency has not submitted yet an annual report to Congress on site use and reporting burdens on award recipients.
“Collecting data on every dollar the government spends is a huge undertaking,” Gavin said. “But moving forward we’re going to continue to be aggressive to put all the information out there.”
GAO’s investigation examined OMB’s compliance with the 2006 Federal Funding Accountability and Transparency Act, which mandated the creation of a public database of federal awards data. Designed to increase transparency and accountability in the contracting process, the legislation required OMB to establish USAspending.gov by Jan. 1, 2008.
Allison said the Obama administration has an opportunity to execute transparency initiatives better than previous leadership, but this will require better agency compliance and improved openness.
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Web Site Woes: USAspending.gov
March 16, 2010 by cs
By Emily Long – 03/12/10 – 04:16 pm ET
Inconsistencies will continue to plague USAspending.gov unless the Office of Management and Budget issues better reporting guidance to agencies, according to the Government Accountability Office.
The GAO report, issued on Friday, examines OMB’s compliance with the 2006 Federal Funding Accountability and Transparency Act, the law that created a public database of federal awards data. Designed to increase transparency and accountability in the contracting process, the act required OMB to establish USAspending.gov no later than Jan. 1, 2008.
GAO found missing data and inconsistencies between USAspending.gov and agency reporting, likely due to limited OMB guidance on how to submit information and the assumption that agencies will voluntarily comply with reporting requirements.
The audit also found that OMB so far has not included subaward data on the Web site, required by January 2009. The agency also has yet to submit an annual report to Congress on site usage and the recipient reporting burden, though officials expect to do so this year.
© 2010 BY NATIONAL JOURNAL GROUP, INC. ALL RIGHTS RESERVED