Georgia Tech Procurement Assistance Center

Division of N.C. company pays $3.5 million to settle False Claims Act allegations

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Indal Technologies, Inc. has agreed to pay $3.5 million to resolve allegations that it knowingly sold defective helicopter landing systems designed for U.S. Navy destroyers.  Indal, of Ontario, Canada, is a division within Curtiss-Wright Corporation of Charlotte, North Carolina.

Since the 1970s, Indal has produced the Recovery, Assist, Secure, and Traverse (RAST) system attached to U.S. Navy’s Arleigh-Burke class destroyers.  RAST systems allow helicopters to land on destroyers.

The RAST system includes a device that locks a hovering helicopter onto a trolley.  Once locked in place, the helicopter moves along a series of steel track plates into a shipboard hangar.  The trolley must remain securely connected to the track plates, because the helicopter may be required to land during rough seas and high winds.  The Navy’s contracts for RAST systems expressly required track plates made of HY100 steel due to the material’s increased strength, combat ruggedness, and protection from corrosion.

The settlement announced last week resolves allegations that Indal, without informing the Navy, knowingly substituted a different, less expensive type of steel in numerous RAST system track plates delivered to the Navy.

This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office for the District of New Jersey.  The investigation was conducted by the Naval Criminal Investigative Service and the Defense Contract Audit Agency.

The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/indal-technologies-agrees-pay-35-million-settle-false-claims-act-allegations

Fort Stewart contractor that posed as small business forfeits $7.8 million

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A company that rents tents and other outdoor structures for events agreed to pay the government $7.8 million to settle charges that it wrongly won Defense Department set-aside contracts reserved for small businesses.

Arena Americas, which does business from multiple locations as Arena Event Services, settled after a False Claims Act investigation conducted by the Army Criminal Investigation Command, the Defense Criminal Investigative Service and the inspector general of the Small Business Administration.

The agreement details how Arena Americas worked with Military Training Solutions LLC to obtain small business defense contracts that were represented as being performed by Military Training Solutions, but were actually performed by Arena Americas.

“As a result of this scheme, which was perpetuated at Fort Stewart, Ga., and at other military installations across the United States, millions of dollars in defense contracts wrongfully were awarded to Arena Americas instead of legitimate small businesses,” said Bobby Christine, U.S. Attorney for the Southern District of Georgia, in a statement. “The U.S. Attorney’s Office will not tolerate any attempts to illegally exploit the system for a company’s personal advantage” in obtaining the set-asides that Congress intended as a tool to help grow small businesses.

Keep reading this article at: https://m.govexec.com/contracting/2018/10/defense-contractor-who-posed-small-business-forfeits-78-million/151951

See statement by U.S. Attorney’s Office for the Southern District of Georgia at: https://www.justice.gov/usao-sdga/pr/defense-contractor-agrees-pay-united-states-78-million-settle-false-claims-act

How contractor fraud is reported shouldn’t affect how it gets investigated

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While the vast majority of federal contractors are dedicated to their craft and their country, a very few wrongdoers occasionally cast a shadow on the industry as a whole. Unfortunately, the way that the government resolves fraud allegations is often dictated not by the egregiousness of the fraud but rather by how the government learns of suspected wrongdoing.

Given this inconsistency, we suggest a more uniform approach to addressing whistleblower allegations.

As many defense contractors have painfully learned over the years, the world of federal procurement regulations is complicated, evolving, and perilous. Even technical violations of procurement regulations can bring stiff consequences. And, more and more, employees at federal contractors are speaking up when they see wrongdoing. We applaud these employees for taking their job responsibilities seriously. And, when an employee sees wrongdoing, he or she should report it.

The traditional way to blow the whistle is to report internally up the chain and—if that does not work—the whistleblower could report suspected wrongdoing to federal contracting officers or to Defense Department hotline numbers.

Keep reading this article at: https://www.govexec.com/contracting/2018/10/how-contractor-fraud-reported-shouldnt-affect-how-it-gets-investigated/151771

Suspicious contract activity proliferates — watch out!

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The Georgia Tech Procurement Assistance Center (GTPAC) continues to become aware of apparent contracting scams designed to trick unsuspecting vendors to deliver products for which they will receive no payment.

(You can view a compendium of articles about previously-identified scams at: https://gtpac.org/?s=scam.)

The latest example that’s come to our attention involves an email sent to vendors asking for a quote on some computer equipment.  The email is supposedly from a contracting representative with the Securities and Exchange Commission.

Vendors are asked to quote on name-brand portable hard drives and two brands of laptop computers.  The solicitation document appears to be a version of the federal Standard Form 1449.  But there are several suspicious elements associated with the solicitation:

  • While the email purportedly is from the SEC’s headquarters, the document indicates that the SEC office is in Germany.
  • Place of delivery is not listed.
  • The solicitation is pre-signed by the contracting officer.
  • The solicitation number is not consistent with standard numbering.
  • The phone number provided could be a cell phone number.

We have seen suspicious documents like this before.  What can result is that a vendor will respond with pricing.  Then, the scam artist will respond by saying that the quote has been accepted and directing that the products be shipped to a particular address.  After that, all communication ceases.  The vendor is cheated out of products (plus the cost of shipping), and receives no payment.

Be alert to scams like this.  If you receive something that looks suspicious, call it to our attention.  We’ll help you figure out what to do.

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

Warning: Don’t be duped into paying for GTPAC’s services — Our services are free of charge!

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It’s come to our attention that there are businesses receiving phony invoices presumably for services received from a Procurement Technical Assistance Center (PTAC).  There is a national network of PTACs, and the Georgia Tech Procurement Assistance Center (GTPAC) is one of them.

GTPAC never charges for our counseling, training or bid match services.

The vast majority of PTACs don’t charge for their services, either.  When nominal fees are charged by a particular PTAC, those fees are clearly described in writing and in advance.

We want you to be aware of an active scam that is taking place right now.  Someone is sending out invoices in the name of the “American Procurement Technical Assistance Center.”   We know of no such organization.  However, all PTACs are members of a professional association known as APTAC — the Association of Procurement Technical Assistance Centers.  Our association never sends invoices or charges fees to PTAC clients.

The phony invoices are in the amount of $249 for “procurement technical assistance.”

If you receive such an invoice, do not pay it.

Also, if you receive such an invoice, do everyone a favor and forward it via email to GTPAC at gtpacatl@innovate.gatech.edu

 

This is a copy of the phony invoice. If you receive it, don’t pay it!   Instead, forward it to GTPAC so that we can continue to warn others about this scam.

In doubt? Check with GTPAC!

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Your team at the Georgia Tech Procurement Assistance Center (GTPAC) stands ready to offer you advice about any aspect of government contracting — especially when you have any doubt about the legitimacy of a contract-related service or solicitation.

We’ve published many articles before about government contracting scams (click here to see previous articles), and once again we want to bring another one to your attention.

Just a few days ago, a GTPAC client contacted one of our Counselors and asked about the legitimacy of a request for a quotation he received, supposedly from the Dept. of Defense (DoD).  Once we examined the email and the attachment that our client sent us, we told him to run — not walk — away from it!

Here Are the Details

The email was purportedly from a DoD official soliciting a quote for some laptops and computer drives.

We examined the email and its attachment, including the following:

  • We called the phone number in the email which was answered by a person who didn’t identify himself.  When we asked questions, he said that he’d have the person identified in the email call us back with details.  No one called back.
  • We checked the identity of the person who supposedly sent the email.  The email’s Quote form identified him as Deputy Director for Procurement at AT&L.   We determined that, in reality, he is DoD’s Deputy Director for Earned Value Management.  AT&L (Acquisition, Technology and Logistics) is a unit within DoD that no longer exists; it’s been reorganized into two groups: research and engineering (R&E) and acquisition and sustainment (A&S).  (See details of that reorganization by clicking here.)
  • We also identified the DoD official’s real email address and his actual phone number; they were not the email address or phone number shown in the email and on the Quote form that was sent to our client.
  • We noted that the federal solicitation number shown on the Quote form was not in the correct format, and the Quote form itself was not a form we have ever seen before.
  • The wording of the email was sloppy and unprofessionally prepared.

Based on the above, we advised our client to not respond because we believe this is a probable scam which will lead to an order to ship the products to a bogus shipping address, for which payment will never be received.  We also alerted the appropriate DoD officials of this probable scam.

What You Should Do

It’s as simple as 1-2-3.

  1. Stay alert to possible scams involving government contracting.  There are many scams in circulation literally every day.
  2. Don’t let the temptation of landing a sale overtake your common sense.  If it looks like easy money, it’s probably bogus.
  3. Whenever you are in doubt, contact GTPAC for advice.  We’ll be happy to check things out for you and provide you with our opinion.  It’s as simple as forwarding anything suspicious to us at: gtpacatl@innovate.gatech.edu.

Remember, the GTPAC team is here to help you succeed in the government marketplace!

P.S.:  If your business is located outside the state of Georgia, you can find a procurement technical assistance center (PTAC) by clicking here.

 

2 men stole minority businesses’ IDs to get public contracts

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Authorities say two upstate New York contractors used the stolen identities of two minority-owned businesses to fraudulently obtain public construction contracts worth millions of dollars.

The state inspector general, attorney general and labor commissioner say Tuesday that 47-year-old Michael Martin and 52-year-old D. Scott Henzel have been indicted on charges that include identity theft and scheme to defraud.

Authorities say the two Albany-area men ran a now-defunct contracting company that took over two minority-owned businesses and used those businesses to land millions of dollars in public works projects.

Keep reading this article at: https://www.newsobserver.com/news/politics-government/national-politics/article215022305.html

Scam Alert: Malicious e-mail spoofs being sent to vendors

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The Defense Logistics Agency (DLA) is reporting that a fake solicitation is being sent to vendors in the form of a Request for Quotation (RFQ).

The fake email solicitation, purporting to be from DLA, has been targeting GSA STARS II vendors.

The emails are not from DLA.mil.  Instead, they are coming from a “Reply-To” address ending in @dla-mil.us, which is not a government address.

In some cases, “stars2@american consultants.com” has been identified to supposedly send messages on behalf of a DLA Contract Specialist — these are also fake.

Some of the bogus emails suggest that vendors use the “stars2” Google Group at https//groups.google.com/a/americanconsultants.com to obtain more information or to unsubscribe from the email communication.  Be advised that “stars2” is not a DLA affiliated group.

Always remain cautious of emails that arrive in your inbox that are not explicitly addressed to you.  Sometimes scammers attempt to hide their actions by addressing their targets in the “bcc” line.

Also, please be aware that the phone number in these recent bogus emails is not a DLA phone number.  In addition, the RFQ form in the email is not an official government form, nor is the signature block legitimate.

DLA’s notice about this matter can be seen here: Vendor Phishing Notice -DLA – 8 June 2018.  The notice shows copies of the bogus emails.

Bottom line: Vendors should always remain vigilant about suspicious emails, and be cautious about opening email attachments.  Questions or comments can be directed to DLA at CERTFusionCell@dla.mil.

In addition, if you ever have a question about the legitimacy of any emails having to do government contracting opportunities, especially those which solicit a fee, please feel free to contact the Georgia Tech Procurement Assistance Center (GTPAC) for advice.  GTPAC can be emailed at gtpacatl@innovate.gatech.edu.

To read previous articles about scams involving government contracting, visit http://gtpac.org/?s=scam

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