Georgia Tech Procurement Assistance Center

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Beware of scams involving FEMA’s response to Hurricane Matthew

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Hurricane Matthew is being used as a platform to circulate false information to government contractors and other vendors.

femaWe want to make sure that you are aware of this situation so no one takes advantage of you, especially at a time when so many people are vulnerable to the storm hitting Florida, Georgia and South Carolina.

Please be on alert to the possibility of phone calls and emails which encourage you to register in a database that will give your company “priority vendor” status by “emergency managers” (implied to be FEMA officials) so that you can be given the “opportunity to help your community for disaster relief efforts and make profits at the same time.”  The services offered in these solicitations carry a price tag ranging between $195 and $1,200 for a variety of services, including a “priority listing.”

Please be advised that FEMA does NOT have a “priority vendor” program. 

FEMA does maintain a legitimate web site for vendors who wish to voluntarily provide supplemental information on the kinds of services they would like to furnish to FEMA, and there is no fee to use it.  That web site is at: https://www.fema.gov/media-library/assets/documents/29748.

FEMA states: “Submission of the vendor profile form does not place you on a preferred list of vendors to be considered for procurements.  FEMA does not maintain such a list. The form is used to assist in secondary market research and is voluntary.  FEMA does not charge any company a basic registration fee.  There are companies that replicate services of Federal Government entities and there are typically fees associated with their services.  Most Federal Government services, if not all, are free of charge.  Always make it a practice to reach out to the appropriate Federal agency first to inquire about the validity of the service, specifically if a fee is associated with it.”

Please feel free to consult with any GTPAC counselor whenever you are in doubt about the legitimacy of any government contract-related offer.  In fact, we would appreciate it if you would share questionable solicitations with us.

Beware of bogus emails supposedly from state contracting offices — and other scams

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We’ve written about this before, and it’s time to repeat our advice:

Watch out for government contract-related scams!

Counselors from the Georgia Tech Procurement Assistance Center (GTPAC) hear from business people every week who tell us about schemes designed to take their money in return for little or nothing of value in their pursuit of government contracts.

One of the latest examples we received actually came from the purchasing office of the State of Oregon warning us to ignore a bogus email that invites vendors to update their contact information in order to receive details on upcoming contract opportunities.  By clicking on the link, vendors would actually be uploading data about their company — such as bank routing information — which would be used for exploitation.

To see our earlier warnings, read these stories:

Georgia Tech purchasing office issues fraud alert, GTPAC warns of other fraud

Bipartisan Senate bill introduced to protect small businesses from contracting fraud

FTC wants to help small businesses spot cyber scams

Beware of Affordable Care Act phishing campaign

Owner of fraudulent Florida FEMA registration firm faces 20 years

FEMA sponsors teleconference July 17th to educate vendors how to respond to emergency RFPs in southeast

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In preparation for this year’s hurricane season, the Federal Emergency Management Agency (FEMA) Region IV Mission Support Division-Contracting, wants to educate suppliers interested in doing business with FEMA.

Shelter is a high priority following a natural disaster, so FEMA wants to ensure that manufacturers of mobile homes, retailers, commercial parks owners, installers, transporters, and all forms of service and supply providers are ready to respond immediately to FEMA’s requests for proposals to provide temporary housing and ancillary services.

FEMA’s goal is to seek local vendors, whenever practical and feasible, within each disaster area for recovery-related purchasing.

In order to do business with FEMA, vendors must be registered with the federal government. The purpose of the FEMA Teleconference is to discuss disaster business opportunities available through FEMA and educate vendors about the process of registering with the federal government.  Registering one’s business with the federal government is a prerequisite for doing business with FEMA.  Registering prior to a natural disaster expedites a vendor’s ability to do business with FEMA.

The FEMA Teleconference will be held Monday, July 17, 2017, from 1:00 to 3:00 p.m., Eastern Time.

There is no cost to attend this event via Teleconference but pre-registration is required.  Limited space is available.  Please email annette.wright@fema.dhs.gov if you desire to join the teleconference.

Teleconference number: 800-320-4330; Passcode: 795068

Resource: SAM Registration Tips from FEMA

Also, GTPAC urges vendors to be aware of disaster-related scams.  Read articles here: http://gtpac.org/?s=fema+scam

Owner of fraudulent Florida FEMA registration firm faces 20 years

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The U.S. Attorney’s office in Tampa, Florida announced last week that Michael Pirolo — the owner of a company that falsely and fraudulently claimed that it would “register” vendors with the Federal Emergency Management Agency (FEMA) to enable the vendors to receive preference in obtaining contracts from FEMA — has pleaded guilty to wire fraud.

Pirolo is facing a maximum penalty of 20 years in federal prison.

According to the plea agreement, Pirolo served as the president of Government Contract Registry, Inc. (GCR), doing business as FEMA Contract Registration.  He employed telemarketers who, during communications with victim-companies, falsely and fraudulently claimed that, for a fee, GCR would “register” the companies in such a way that they would receive contract preferences from FEMA.

  • The GCR telemarketers’ communications were based on instructions and scripts that they had received from Pirolo.
  • The GCR telemarketers falsely and fraudulently stated that for a one-time fee of $500, the customer would be registered with FEMA, and that this registration would place the customer company on a list of preferred vendors.
  • The GCR telemarketers also falsely stated that when the need for particular vendor services arose, FEMA would bypass the contract acquisition process, contact the registered victim-company, and then offer a no-bid contract.
  • At times, Pirolo also instructed GCR telemarketers to go back to victim-companies that had already paid the $500 one-time fee and seek renewal and payment of another fraudulent $500 fee.

To further the scheme, the GCR telemarketers provided victim-companies with an online GCR form that requested the same information as a form on FEMA’s website.

FEMA does not charge a fee to companies to complete its form, which assists the agency with market research and does not “register” companies. Completing this form is not part of the U.S. government’s contract acquisition process.

Once GCR telemarketers received the victim-companies’ information, GCR then completed and submitted the same information — online on FEMA’s website — that then enabled emails to be sent from FEMA to the victim-companies, giving the appearance that the companies had been “registered.” The FEMA emails gave GCR the appearance of legitimacy.

Approximately 1,200 victim-companies were misled by this scheme, paying GCR at least $604,500.

This case was investigated by the Inspector General offices of the Department of Homeland Security and the General Services Administration.

The Georgia Tech Procurement Assistance Center (GTPAC) reminds its clients that government agencies never charge a fee for registration in government databases.  This is certainly true with vendor databases maintained by FEMA and the government-wide vendor database called the System for Award Management, better known as SAM.

While one scam — the company featured in this article — has apparently been put out of business, there are several others still in operation, so beware!   To read more about questionable practices involving the FEMA and SAM vendor registration databases, click on the links below:

Fraud alert: Beware of unsolicited purchase orders and other possible government scams

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What would you do if you responded to a request for quotation, received an order, and shipped products — only to later discover that the entire transaction was fake?

This is what happened recently to a businesswoman who reported to the Georgia Tech Procurement Assistance Center (GTPAC) that she received purchase orders from two out-of-state public universities, one located in Mississippi and the other in Minnesota.  She responded by shipping goods, and sent along her invoice.

It turns out that the purchase orders were bogus.  This small business now finds that it will not receive payment and may not be able to recover the equipment that was shipped.

What are some of the lessons you can learn from this unfortunate experience?   Here are six tips:

  1. An unsolicited order from a governmental entity (e.g., agency, city, county, school) is a virtual impossibility.  If you didn’t submit a bid, chances are you won’t receive a purchase order.
  2. When you receive a purchase order, make sure it identifies the government official placing the order and is signed.
  3. Never assume that any purchase order is valid.  Call the point-of-contact (POC) listed on the order to make sure it is legitimate.  Be alert to the possibility that the phone number on the order might be bogus too.Fraud Waste Abuse
  4. Even if the order appears to be legitimate, conduct an Internet search for the purchasing office of the government buyer to see if the location and contact information line-up with what’s on the purchase order. If the contact phone numbers are different on the order and on the web site, call the buyer to inquire about the order — and be sure to call the buyer at the phone number listed on the government entity’s website.
  5. Also pay attention to the “ship to” location.  If it looks suspicious (i.e., it’s a location other than the government entity’s location), ask the buyer why it’s different.
  6. If, after checking, you suspect the purchase order to be fake, report the incident to the real government organization as well as to appropriate law enforcement authorities.

In the case brought to GTPAC’s attention, the business has reported the incidents to the purchasing offices of both universities.  She furnished them with copies of the documents she received — orders that are on official letterhead and appear to be legitimate.  She also reported the incidents to local law enforcement authorities who are investigating the locations where the equipment was shipped.

GTPAC recommends that all businesses stay alert to possible fraud in the government contracting process and in other government functions.  Here are some tips:

Remember the old saying, “If something looks too good to be true, it probably is.”   Whenever you receive a call, letter, fax or email about something involving government contracting — and it looks fishy — feel free to contact your team at GTPAC.  We’ll be glad to give you any facts we are aware of, along with suggestions about how you might best proceed.

 

 

 

FEMA warns vendors to look twice at privately-operated registration schemes

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In addition to registration in the federal government’s vendor registration system — the System for Award Management (SAM) — the Federal Emergency Management Agency (FEMA) recommends that businesses register in FEMA’s own database.

There’s the rub.

If businesses don’t know how to access FEMA’s vendor database, they sometimes stumble into privately-operated websites which charge upwards of $500 to register.  In actuality, it’s free to register in FEMA’s official database.

Completion of FEMA’s official Vendor Profile Form serves as supplemental market research for the agency — so they have detailed capabilities descriptions on companies — better enabling FEMA to respond in emergencies.  In completing FEMA’s form, vendors are encouraged to be specific about how your products and/or services can support FEMA’s mission.   The official Vendor Profile Form can be accessed at: https://www.fema.gov/media-library/assets/documents/29748.  Once completed, the Form should be submitted to: FEMA-Industry@fema.dhs.gov

FEMA does not charge any company a registration fee.  FEMA advises that “there are companies that replicate services of Federal Government entities and there are typically fees associated with their services.  Most Federal Government services, if not all, are free of charge.  Always make it a practice to reach out to the appropriate Federal agency first to inquire about the validity of the service, specifically if a fee is associated with it.”

To reiterate: FEMA does not charge a fee to submit a Vendor Profile Form. 

For more information about vendor registration in SAM, please see: http://gtpac.org/sam-gov-registration-is-free-and-help-with-sam-is-free-too.

For information about fraud involving government contracting, see our article at: http://gtpac.org/fraud-alert-beware-of-unsolicited-purchase-orders-and-other-possible-government-scams.

This is the second time that the Georgia Tech Procurement Assistance Center has written about FEMA registration.  See our July 2014 article at: http://gtpac.org/2014/07/22/beware-of-government-vendor-registration-websites-that-charge-a-fee. 

Owner of fraudulent government contract registration firm sentenced to prison for tricking 1,200 vendors

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In April of this year, the Georgia Tech Procurement Assistance Center (GTPAC) reported on the guilty plea entered by the operator of a phony government contract registration firm charged with wire fraud for his part in tricking at least 1,200 businesses into believing they needed to employ his services in order to qualify for contracts issued by the Federal Emergency Management Agency (FEMA), a unit of the U.S. Dept. of Homeland Security.

On Friday, August 11, 2017, he was sentenced to four years and two months in federal prison, along with a $594,000 judgment against him, for his role in these fraudulent activities.

In Tampa, Florida, U.S. District Judge Charlene E. Honeywell imposed the sentencing terms on Michael Pirolo who earlier pled guilty to the charges against him.  According to court documents, Pirolo served as the president of Government Contract Registry, Inc. (GCR), doing business as FEMA Contract Registration. He employed telemarketers who, during communications with victim-companies, falsely claimed that — for a fee — GCR would “register” the companies with FEMA to enable them to receive preference in obtaining contracts from FEMA.  The GCR telemarketers’ communications were based on instructions and scripts that they received from Pirolo.

Specifically, the telemarketers falsely and fraudulently stated that for a one-time fee of $500, the customer would be registered with FEMA, and that this registration would place the customer on a list of “preferred” vendors.  When the need for a vendor arose, GCR telemarketers falsely stated that FEMA would bypass the standard contract acquisition process, contact the registered victim-company, and then offer a no-bid contract.  At times, Pirolo also instructed GCR telemarketers to go back to victim-companies that had already paid the $500 one-time fee and seek renewal and payment of another fraudulent $500 fee.

To further the scheme, the GCR telemarketers provided victim-companies with an online GCR form that requested the same information as a form on FEMA’s public website.  In fact, FEMA does not charge a fee to companies to complete its vendor information form.  The purpose of FEMA’s form is to assist the agency with market research in identifying viable possible vendors.  FEMA’s form does not “register” companies.  In actuality, registration in the federal government’s System for Award Management (SAM) is the government-wide vendor registration system.  Vendors can register in SAM at no cost.  

Once GCR telemarketers received the victim-companies’ information, GCR completed and submitted the online FEMA form that then enabled emails to be sent from FEMA to the victim-companies, giving the appearance that the companies had been “registered.”  The FEMA emails gave GCR the appearance of legitimacy.

The approximate 1,200 victim-companies who were misled by this scheme paid GCR at least $604,500.

This case was investigated by the U.S. Department of Homeland Security, Office of Inspector General, and the General Services Administration, Office of Inspector General.  It was prosecuted by Assistant United States Attorney Adam M. Saltzman.

GTPAC again reminds its clients and all other vendors that government agencies never charge a fee for registration in government databases.  This includes vendor databases maintained by FEMA and the government-wide vendor database known as SAM.

While one scam — the company featured in this article — has been put out of business, there are others still in operation, so beware!   To read more about questionable practices involving the FEMA and SAM vendor registration databases, click on the links below:

For no-cost assistance with registering in SAM — and no-cost help with many other aspects of government contracting — contact GTPAC at http://gtpac.org/contact-us.   If your business is located outside the state of Georgia, feel free to contact the procurement technical assistance center (PTAC) nearest you.  Locate the PTAC offices in your state at http://www.aptac-us.org/find-a-ptac.

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