Georgia Tech Procurement Assistance Center

Lawmakers announce deal to avoid government shutdown

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Lawmakers announced last Thursday that they have reached an agreement that would avoid a government shutdown at the end of the month.

At a conference committee meeting on Thursday, Rep. Rodney Frelinghuysen, R-N.J., chairman of the House Appropriations Committee, said lawmakers would push that timeframe back until at least Dec. 7 with a continuing resolution.

That measure would only put some agencies on autopilot, as lawmakers are poised to pass full-year, line-by-line appropriations for most of the government in the coming weeks. Congress was expected on Thursday to send President Trump the first package of spending bills, a “minibus” that funds the departments of Veterans Affairs, Energy and related agencies, as well as the legislative branch. The White House indicated this week that President Trump would sign the measure into law.

Keep reading this article at: https://www.govexec.com/management/2018/09/lawmakers-announce-deal-avoid-shutdown/151246/

Boosting small business demands big ideas

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There are 28 million small businesses in America, and Defense Contract Management Agency’s small business team wants as many of them as possible to join the defense industrial base.

“Our mission is to provide small business support to our defense and government customers by ensuring subcontracting compliance and optimizing subcontracting opportunities,” said Tatia Evelyn-Bellamy, the director of DCMA’s Small Business Office and Small Business Compliance Center. “Our strategy is to actively assist customers in developing aggressive but reasonable subcontracting plans for their contractors and review contractor subcontracting program compliance.”

In line with the agency’s over-arching mission of warfighter support, Evelyn-Bellamy explained her team’s effort “in assisting military partners with pre-award and post-award subcontract management, and working with prime contractors to achieve subcontract success” helps foster business innovation and new technology, supports the warfighter, strengthens and sustains the military and economic industrial base, and promotes private enterprise.

It is a massive undertaking that the office’s name naturally undersells. Small businesses account for 54 percent of all U.S. sales and provide 55 percent of all U.S. jobs. To support this large group of American taxpayers, the agency’s small business team partners with other DCMA departments to create an environment of support.

“We maintain a collaborative relationship with senior leaders, program managers and the Contracts Directorate to ensure customers and contractors develop acquisition strategies to identify and receive quotes, bids, or proposals from small business vendors,” said Rosalyn Wiggin, a small business professional within the SBO. “Our joint effort educates customers on small business regulation requirements and the benefits of small businesses — particularly their responsiveness to requirements and agility to perform in a more cost-effective manner compared to current large business suppliers and service providers.”

The U.S. Small Business Administration’s categorization of “small” depends on the industry. It is then further defined by average number of employees over the past 12 months or average annual receipts over the past three years. Prospective contractors should visit the administration’s website for more information. As a first-glance qualification test, SBA guidelines maintain businesses must meet the following parameters to qualify for small-business government contracts:

  • Is organized for profit;
  • Has a place of business in the United States;
  • Operates primarily within the U.S. or makes a significant contribution to the U.S. economy through payment of taxes or use of American products, materials or labor;
  • Is independently owned and operated; and
  • Is not dominant in its field on a national basis.

DCMA’s collaborative effort begins once business owners determine they qualify for small-business government contracts. Many owners may find it difficult to navigate regulations, especially those new to government contracts. It is a challenging environment that can at times punish inexperience, but Evelyn-Bellamy said her team maintains passion in pursuit of its mission.

“We are committed to expanding the small business industrial base,” Evelyn-Bellamy said.

In support of that commitment, DCMA SBO works with its DoD and industry counterparts to include the Navy’s Office of Small Business Programs, local Procurement Technical Assistance Centers, the National 8(a) Association, the National Defense Industrial Association, veterans’ groups and many more.

In addition to supporting these organizations, the agency’s small business team conducts training sessions, when appropriate, for both contractor and government personnel on existing and emerging small business issues.

“We support many groups whose goals are to educate, inform and train small business personnel and our industry counterparts on current programs, processes and initiatives,” said Eric Claud, an SBO professional. “It really is all about increasing small business opportunities for prime contractors, and particularly subcontractors, across the Department of Defense and the federal government.”

All of these efforts can make a huge difference in the financial health and success of small and socio-economic disadvantaged businesses. According to the SBA, “most government agencies ‘set aside’ a percentage of their acquisitions for small and disadvantaged businesses. In some cases, these set-asides might consist of certain types of tasks on larger contracts. In other cases, entire contracts may be designated for small businesses.”

In other words, there are often government-contract opportunities available to small business owners. Whether owners are qualified and prepared to properly apply is another story. DCMA’s small business team hopes to ensure that answer is always yes.

This article was originally published in the 2017 DCMA INSIGHT magazine. You can read the original here: http://www.dcma.mil/LinkClick.aspx?fileticket=rX-EzAgRqWU%3d&tabid=2273&portalid=31

Orlando contractor to pay $575,000 after DOL investigation uncovers improper pay deductions

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Loyal Source Government Services LLC – a medical and support staff contactor based in Orlando, Florida – will pay $574,989 to 4,047 employees after a U.S. Department of Labor Wage and Hour Division (WHD) investigation determined the company violated the McNamara-O’Hara Service Contract Act (SCA).

WHD investigators found Loyal Source Government Services LLC unlawfully deducted $10 per paycheck from each employee for the administration of employee health and welfare benefits.

“This investigation demonstrates the Department of Labor will enforce all applicable laws to ensure that employees receive legally required pay and benefits,” said Wage and Hour Division District Director Daniel White, in Jacksonville. “The Department’s Wage and Hour Division encourages all employers to make use of the many tools we provide to help them understand and comply with the law, and to call us for assistance.”

For more information about the SCA and other laws enforced by the Division, contact its toll-free helpline at 866-4US-WAGE (487-9243). Information is also available at http://www.dol.gov/whd/ including a search tool to use in the event a worker suspects he/she may be owed back wages.

Source: https://www.dol.gov/newsroom/releases/whd/whd20180907

Defense contractors to face new cost accounting oversight with creation of Defense Cost Accounting Standards Board

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Section 820 of the National Defense Authorization Act for Fiscal Year 2017 (NDAA) establishes a new Defense Cost Accounting Standards Board (D-CASB) to oversee the application of the cost accounting standards (CAS) to defense contracts.

The amendments made by Section 820 shall take effect on October 1, 2018.

Originally issued between 1970 and 1980 by the Cost Accounting Standards Board (CASB), the CAS are a series of accounting standards “designed to achieve uniformity and consistency” in the measurement of costs, the assignment of costs to cost accounting periods, and the allocation of costs to government contracts. 48 C.F.R. § 9901.302(b).

When first proposing what is now Section 820 of the NDAA, the Senate Armed Services Committee expressed its concern that the current CAS “favor incumbent defense contractors and limit competition by serving as a barrier to participation by non-traditional, small business, and commercial contractors.”

The Committee also viewed the CASB with disapproval, noting how the CASB does not currently have a quorum and has not met in over three years. Thus, the Committee doubted that “any credible reform will emanate out of [the CASB] in the future,” and opted to favor instead a new D-CASB that “will be better suited to meet national security needs.”

Keep reading this article at: https://www.governmentcontractslawblog.com/2017/04/articles/department-of-defense/cost-accounting-standards-board/

Infrastructure spending: Which state is falling apart the worst?

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In the Donald Trump era, the United States appears to be more politically divided than it has been in decades. Still, there are matters of public policy that most Americans can agree on — chief among them is investment in infrastructure. According to a recent non-partisan Gallup poll, three out of four Americans support the president’s plan of spending more federal money on infrastructure.

The president proposed a $1 trillion plan to improve aging roads, bridges, and tunnels across the country. While funding the project has proven to be a political challenge, broad public support for the plan is rooted in necessity.

About seven out of every 100 miles of roadway nationwide are in poor condition; 9 percent of bridges nationwide are structurally deficient, meaning that they are in need of some repair; and 17 percent of dams in the country have a high hazard potential — meaning a functional failure would result in the loss of life.

Keep reading this article at: https://www.usatoday.com/story/money/economy/2018/08/13/infrastructure-spending-states-that-are-falling-apart/37270513/

SBA announces decrease in surety bond guarantee fees

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The U.S. Small Business Administration (SBA) this week announced the first fee decrease in Surety Bond Guarantees in 12 years.

The fee decrease will be in effect for guaranteed bonds approved during fiscal year 2019, taking effect October 1, 2018 and ending September 30, 2019.

SBA’s Surety Bond Guarantee (SBG) program is reducing the surety fee from 26 percent to 20 percent of the bond premium charged to the small businesses and is reducing its contractor fee from $7.29 per thousand dollars of the contract amount to $6.00 per thousand dollars of the contract amount.

“Reducing the SBG program fees will not only directly help small businesses, but also will incentivize surety companies and their agents to increase support for small businesses in the marketplace,” said Peter C. Gibbs, Acting Director of SBA’s Office of Surety Guarantees.

Under the SBG program, the SBA guarantees bid, payment, and performance bonds for small and emerging contractors who cannot obtain surety bonds through regular commercial channels.  SBA guarantees contracts up to $10 million, including the streamlined QuickApp application for those up to $400,000.

The SBA’s guarantee gives sureties an incentive to provide bonding for small businesses and, thereby, assists small businesses in obtaining greater access to contracting opportunities. Currently, there are 34 participating sureties and over 350 active agents in the SBG program.  On average, completed surety bond applications are reviewed and processed in less than two days.

The program is currently outperforming its previous year results yielding 27,000 jobs supported, 3,000 final bonds, and $1.7 billion in final bond contract amounts in fiscal year 2018.

For more information about this decrease or to obtain assistance, contact Jermanne Perry, Senior Management Analyst, Office of Surety Guarantees, (202) 401-8275; jermanne.perry@sba.gov, or your local SBA District Office.

South Carolina ‘mastermind’ pleads guilty to cheating government for million-dollar contracts

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He betrayed his wife. He used friends as pawns in illegal schemes.

For years, he bilked the federal government out of tens of millions of dollars in fat federal military construction contracts meant for disabled veterans, women and African-Americans.

And on Tuesday of last week, Thomas Brock of Camden faced his reckoning.

“I find you guilty,” U.S. District Judge Michelle Childs told Brock, 61, in a sparsely attended hearing at the U.S. federal courthouse in Columbia, SC.

Brock will be sentenced in December and is free on bond until then. He could be sentenced to up to nine years in prison, assistant U.S. Attorney DeWayne Pearson said August 28th.

Keep reading this article at: https://www.thestate.com/news/local/crime/article217449050.html

Former company owner sentenced for $13.7 million ‘rent-a-vet’ scheme

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A former operator of a Kansas City construction company, Patriot Company, Inc., was sentenced in federal court last week for his role in a “rent-a-vet” scheme to fraudulently obtain more than $13.7 million in federal contracts.

Jeffrey K. Wilson was sentenced to 18 months in federal prison without parole. Under the terms of his plea agreement, Wilson has also consented to the federal civil forfeiture of approximately $2.1 million.

On Jan. 31, 2018, Wilson pleaded guilty to one count of government program fraud. Co-defendant Paul R. Salavitch pleaded guilty to a misdemeanor charge of making a false writing and awaits sentencing.

Wilson, who is not a veteran, managed the day-to-day operations and the long-term decision-making of Patriot Company from September 2005 to January 2014. Wilson and Salavitch falsely certified that Salavitch, who is a service-disabled veteran, was involved in the day-to-day operations of Patriot Company. Salavitch’s purported active management qualified Patriot Company to obtain set-aside contracts to which it was not entitled.

Wilson admitted he used Salavitch’s veteran and service-disabled veteran status in a “rent-a-vet” scheme to obtain 20 government contracts for which Patriot Company received more than $13.7 million.  As a result of the fraud scheme, legitimate veteran-owned-and-run businesses were not awarded these contracts. In one instance, according to court documents, Wilson brazenly challenged the government’s award of a set-aside contract to a service-disabled veteran bidder and Patriot Company fraudulently obtained that contract.

Wilson’s plea agreement cites 20 contracts with the U.S. Department of Veterans Affairs and the U.S. Army, which were fraudulently obtained by Wilson, Salavitch and Patriot Company. The contracts, which ranged as high as $4.3 million, included construction projects in Missouri, South Dakota, Texas, Nebraska, Oklahoma, Michigan, Indiana, Tennessee, Iowa, Illinois and North Dakota.

In September 2013, the Veterans Administration conducted an unannounced site visit of Patriot Company. The site inspector discovered that Salavitch was working 40 miles away at his full-time job as a federal employee with the Department of Defense in Leavenworth, Kansas.

Wilson did not stop violating the law even after the government’s site visit.  Instead, Wilson and Salavitch fought cancellation of Patriot Company’s status. In November 2013, Salavitch falsely certified to the Missouri Division of Purchasing and Materials Management that Patriot Company was a legitimate service-disabled veteran-owned small business when he knew it was not because he did not actively run the company. In December 2013, the Veterans Administration de-certified Patriot Company.

This case was investigated by the Department of Veterans Affairs – Office of Inspector General – Criminal Investigation Division, and the General Services Administration – Office of Inspector General.

Source: https://www.justice.gov/usao-wdmo/pr/former-company-owner-sentenced-137-million-rent-vet-scheme

Pentagon cyber shortfalls leave data at risk, key senators warn

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The Pentagon isn’t taking strong enough action to ensure that defense contractors are protecting highly technical but unclassified information from hacking, according to the top lawmakers on the Senate Armed Services Committee.

The Senate panel “has gathered information that suggests DoD is simply not doing enough to protect controlled, unclassified information,” the lawmakers, including ailing Republican Chairman John McCain and Jack Reed, the panel’s top Democrat, wrote to Defense Secretary Jim Mattis in a previously undisclosed letter obtained by Bloomberg News.

“We are concerned with existing regulations and best practices” not being followed in matters such as contracts lacking appropriate cybersecurity clauses, computer networks operating without multifactor authentication for access, strong remote user policies and “insufficient third-party verification of compliance with cybersecurity standards,” the lawmakers wrote last month.

The vulnerability of U.S. systems to hacking has been highlighted in recent years by incidents including attacks on banks and energy infrastructure, as well as efforts to infiltrate state election systems in 2016 and this year. Earlier this year, five pipeline operators in the U.S. said their third-party electronic communications systems were shut down by hackers. The U.S. says the biggest foreign hacking threats come from Russia, China and Iran.

Keep reading this article at: https://www.bloomberg.com/news/articles/2018-08-23/pentagon-cyber-shortfalls-leave-data-at-risk-key-senators-warn

The Georgia Tech Procurement Assistance Center (GTPAC) has produced a video, template and other resources designed to help contractors comply with the DoD/NIST cybersecurity rules.  These resources are available  at: http://gtpac.org/cybersecurity-training-video/

Reforms deliver wins for small businesses

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By some metrics, 2017 was a banner year for small business federal contractors. In May 2018, the Small Business Administration announced that, for the first time, the federal government exceeded $100 billion in prime contract awards to small businesses in fiscal year 2017.

Despite reaching this milestone, small business federal contracting still has room for improvement. For example, the SBA’s data also show that the percentage of total federal contracting dollars earned by small businesses declined for the second year in a row, falling to 23.8 percent from a historic high of 25.7 percent for fiscal year 2015.

Given these mixed results, is there a case for near-term optimism for the small business contracting community? Recent changes to federal caps on the use of micro-purchasing and simplified acquisition methods hold the promise of more agile acquisition, benefitting small businesses.

Indicative of the big changes forthcoming is a June 2018 White House Office of Management and Budget memo streamlining small business contractors’ access to federal contracting opportunities.

Keep reading this article at: http://www.nationaldefensemagazine.org/articles/2018/7/27/reforms-deliver-wins-for-small-businesses

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