Georgia Tech Procurement Assistance Center

How the Navy SEALs wound up buying 450 counterfeit radio antennas

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Last spring, the Pentagon spent more than $165,000 on a set of sophisticated radio antennas for a contingent of elite Navy SEALs.  Unfortunately, they were cheap knockoffs, courtesy of a California vendor apparently looking to secure some extra profit.

A search warrant application recently filed by the Defense Department provides a glimpse into how the alleged scam worked.

In April 2019, the Naval Special Warfare Command solicited bids to buy 450 VHF/UHF antennas for use by members of the Navy SEALs.  The request required the body-worn antennas come from New York-based manufacturer Mastodon Design, and that the supplier qualify as a small business.

The government used to purchase the antennas directly from Mastodon.  However, it no longer could because after Mastodon’s sale to a large multinational defense contractor, the once-boutique company no longer qualified as a small business.  This meant the Navy would have to buy Mastodon’s antennas through an authorized small distributor or reseller.

On May 1, the sales team at Mastodon got an email from the procurement department of a California company called Vizocom.  It said the company was bidding on a Navy contract and wanted to know how much 450 Mastodon antennas would cost.  Mastodon quoted a price: $165,109.50.

Vizocom then submitted its bid to the Navy for the exact same amount.  A source with direct knowledge of the situation told Quartz it was highly unusual that Vizocom wouldn’t want to make any money on the deal.  At this price, the Navy awarded Vizocom the contract.

The company, however, would never actually place the order with Mastodon.  Instead, it would import low-cost antennas from China and pass them off as from Mastodon using fake serial numbers and spec sheets, according to the search warrant application and sources with knowledge of the deal.

Continue reading at:  Yahoo Finance

Lockheed Martin’s Marietta GA facility wins major C-130J contract

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Lockheed Martin has won a $3 billion multiyear contract to deliver up to 50 C-130J Super Hercules to the US Air Force (USAF), US Marine Corps (USMC) and US Coast Guard.

The Department of Defense awarded $1.5 billion for the first tranche of 21 C-130Js on 27 December, the company says on 13 January.

In total, the company is contracted to deliver a mix of 24 HC-130Js and MC-130Js to the USAF, and 20 KC-130s to the USMC, while the US Coast Guard has an option to buy six HC-130Js, as part of the “multiyear III award”.

Continue reading at:  FlightGlobal

Hartsfield-Jackson designates restaurant spots for small businesses

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As Hartsfield-Jackson International Airport puts contracts up for bid for new restaurants, half of the contracts are designated for small businesses.

The airport concessions business is dominated by longtime concessionaires and large multinational firms with hundreds of locations around the world that have expertise in operating in the unpredictable, security-restricted, round-the-clock environment of an airport.

That can make it difficult for small, local restaurateurs to win a contract at the world’s busiest airport.

Continue reading at:  AJC

Alpharetta man charged with conspiracy to defraud U.S. government

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Three men were charged recently in federal court in Boston with conspiracy to defraud the United States and mail fraud in connection with a scheme to obtain government contracts.

Frank Apicella, 63, of Groveland, Massachusetts; Michael Sforza, 59, of Alpharetta; and James Apicella, 37, of Kingston, New Hampshire, were charged with one count of conspiracy to defraud the United States and one count of mail fraud.

According to the charging document, beginning in 2011 the defendants used Tactical Office Solutions, a company run by James Apicella, to bid for and obtain government contract work that was set aside for Service-Disabled Veteran-Owned Small Businesses and Historically Underutilized Business Zone companies.  Although the work was bid by and awarded to Tactical Office Solutions based under these set-aside programs, the work was actually mostly performed by FENS, a company owned and operated by Frank Apicella and Michael Sforza that was not eligible for these contracts.

Continue reading at:  Patch.com

More firms will now be eligible for federal government small business contracts

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More companies will be eligible to compete for federal contracts reserved for small businesses, due to the recent implementation of a 2018 law.

On Jan. 6th 2020, the Small Businesses Administration’s final rule to implement the 2018 Small Business Runway Extension Act took effect, increasing the period of measuring small businesses’ annual revenue from three to five years in the contract evaluation process.  This is “going to increase the pool of eligible participants and make a lot more companies eligible to participate for small business set asides,” said Daniel Snyder, director of contract analysis at Bloomberg Government.

The act was signed into law on Dec. 17, 2018.  Snyder said there was a delay in implementation because there were “a small fraction” of companies put at a disadvantage by the change, so the agency wanted to figure out how to best mitigate any negative impact.  The compromise was to “give small businesses the option to choose either three or five years and then there will be a phase-in period, so companies will be allowed to choose…whichever one puts them at a greater advantage until the phase-out period concludes.”  The transition period ends on Jan. 6, 2022.

Continue reading at:  Government Executive

Space startups warming to U.S. government as investor, customer

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Space startups are becoming more acquainted with the U.S. government as a customer and an investor, though the pathways to both remain difficult, a panel of experts said Jan. 14.

“2019 was the year of government,” Carissa Christensen, CEO of analyst firm Bryce Space & Technology, said at a Washington Space Business Roundtable event here.  “We saw many firms overtly or less overtly turn towards government as a potential customer.”

Christensen said there are several reasons for the stronger interest in U.S. government contracts among startups.  The creation of the Space Force and an increase in study contracts from the National Reconnaissance Office and other agencies is making government business more interesting to startups, she said.  Some startups could also be facing slow development of their target commercial market, she said.

“To me, the government as a customer is pretty important and an increasingly critical element of the potential success of venture-funded space startups,” Christensen said.

Continue reading at:  SpaceNews

Multi-faceted SBA final rule clarifies existing regulations and brings long-awaited changes

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WHAT:  The U.S. Small Business Administration (SBA) published a sweeping final rule implementing several provisions of the National Defense Authorization Acts of 2016 and 2017 and the Recovery Improvements for Small Entities After Disaster Act of 2015 (RISE Act), as well as clarifying existing regulations.  The new rule addresses contracting preferences for small businesses in disaster areas; SBA Procurement Center Representative (PCR) reviews; contracting officer oversight of subcontracting restrictions; limitations on subcontracting exclusions; indirect costs in commercial subcontracting plans; material breach of subcontracting plans; size and status recertifications; and the kit assembly exclusion to the non-manufacturer rule (NMR).

WHEN:  The SBA published the rule on November 29, 2019, effective December 30, 2019.

WHAT DOES IT MEAN FOR INDUSTRY:  SBA’s new rule touches on many different areas, from oversight to contract administration.  While some of these changes will have minimal direct effect on contractors, others could significantly impact the way small and large businesses seek opportunities and structure their agreements and proposals.

Continue reading at:  Wiley Rein

SBA proposes combining 8(a) Mentor-Protégé Program with the All Small Mentor-Protégé Program

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On November 8, 2019, the Small Business Administration published a proposed rule to combine the 8(a) Business Development (BD) Mentor-Protégé Program with the All Small Mentor-Protégé Program.  84 Fed. Reg. 60,846 (Nov. 8, 2019) . The far-reaching SBA proposal also includes changes to the mentor-protégé programs, changes affecting joint ventures, changes for certain details in the 8(a) Program, and new requirements for certain multiple-award contracts, among others. Comments on the proposed rule are due January 17, 2020.

Combining the 8(a) BD and All Small Mentor-Protégé Programs

Although the 8(a) Mentor-Protégé Program seems to have been around forever, SBA started it relatively recently, in 1998.  The purpose of the program is to enhance the ability of the minority-owned protégé to compete for government and commercial contracts, through business assistance for the protégé, such as technical or management training, financial assistance in either equity investments or loans, and subcontracts.  But it also proved popular because it enabled large firms to form joint ventures with 8(a) protégés, which were then eligible to compete for any opportunity for which the protégé qualified.

In 2010 and 2013, in two separate legislative enactments, Congress created a similar mentor-protégé program, first for the other socioeconomic preference programs – the Service-Disabled Veteran-Owned Small Business Concern (SDVOSB) Program, the HUBZone Program, and the Women-Owned Small Business (WOSB) Program – and subsequently expanding it to cover all small businesses (the “All Small Mentor-Protégé Program”).

Since the purposes and benefits of the two programs are identical, SBA now proposes to eliminate the 8(a) Mentor-Protégé Program and allow 8(a) companies to continue to form mentor-protégé joint ventures through the All Small Mentor-Protégé Program.

Continue reading at:  Miles & Stockbridge

SBA to increase enforcement in 2020 on set-asides and subcontracting

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One of the most overlooked compliance requirements for set-aside contracts are the limitations on subcontracting.  Don’t take my word for it—GAO has noted in several reports that contracting officers generally do not monitor or enforce the requirement that the small business prime contractor must self-perform a certain percentage of the contract.  The limitations on subcontracting requirements are critical to the efficacy of the small business programs.  Indeed, the goals of the programs are not served if small businesses do not perform contracts reserved explicitly for them.  As new SBA rules have taken effect on December 30th, we expect enforcement to be a more significant focus in 2020.  As a result, government contractors large and small need to make a New Year’s resolution to adjust or implement compliance strategies to ensure they understand and satisfy the limitations on subcontracting for set-aside projects.

Continue reading at:  Piliero Mazza

DoD releases version 0.7 of its Cybersecurity Maturity Model Certification

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On December 13, the Department of Defense (“DoD”) released the latest version of its Cybersecurity Maturity Model Certification (“CMMC”).  This is the third iteration of the draft model that DoD has publicly released since it issued the first draft in October.  (We previously discussed Version 0.4 and Version 0.6 of the CMMC in prior blog posts.)

DoD describes the CMMC as “a DoD certification process that measures a DIB sector company’s ability to protect FCI [Federal Contract Information] and CUI [Controlled Unclassified Information].”  DoD has stated publicly that it intends to begin incorporating certification requirements into solicitations starting in Fall 2020, with compliance audits beginning in late 2020 or early 2021.  Depending the sensitivity of the information that contractors will receive in the course of performing work for DoD, they will be expected to demonstrate compliance through third party audits with the requirements set forth under one of five certification levels.  This applies even where contractors will not be handling FCI or CUI in the course of performing their contracts.

The two most significant updates to the model in this version of the draft are (i) the addition of “Practices” for obtaining Level 4 and 5 certifications, and (ii) an expansion of “clarifications” section, which now covers the requirements of Levels 2 and 3 of the model, in addition to Level 1.  These changes and others are discussed in more detail later in this article.  Given the expected release in late January 2020, it is likely that the requirements in this draft will closely resemble those that will be set forth in Version 1.0 of the CMMC framework, which is anticipated to serve as the basis for the first contractor audits.

Continue reading at:  Inside Government Contracts

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