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Subcontractor who failed to follow the FAR finds that ‘fair’ and ‘just’ are not synonymous

April 12, 2019 By Andrew Smith

Inscribed over the doors of the U.S. Supreme Court are the words “Equal Justice Under Law.” It’s a reminder that judicial decisions should be just. That doesn’t necessarily mean fair.

In Aspic Engineering and Construction Company v. ECC Centcom Constructors, LLC, U.S. Court of Appeals for the 9th Circuit, Case No. 17-16510 (January 28, 2019), the 9th Circuit overturned an arbitration decision in favor of a local Afghani subcontractor seeking termination costs after it was terminated for convenience by a U.S.-based general contractor.  This, despite the arbitrator’s finding that the subcontract was “clearly drafted to give every advantage to” the general contractor, that the local Afghani subcontractor’s “experience with government contracting [was] not nearly as extensive as that of” the general contractor, and “that the normal business practices and customs of subcontractors in Afghanistan were more ‘primitive’ than those of U.S. subcontractors experienced with U.S. Government work.”

Background

Local Afghani subcontractor Aspic Engineering and Construction Company was awarded two subcontracts by ECC Centcom Constructors, the general contractor, on two projects in Afghanistan overseen by the United States Army Corps of Engineers. The first subcontract involved construction of various buildings in the Badghis province of Afghanistan.  The second subcontract involved the construction various buildings Sheberghan province of Afghanistan.  Both subcontracts included clauses from the Federal Acquisition Regulation (FAR), which were incorporated by reference, and included flow-down provisions obligating Aspic to ECC in the same manner that ECC was obligated to the U.S. government.

Keep reading this article at: https://www.jdsupra.com/legalnews/federal-subcontractor-who-failed-to-43185/

Filed Under: Contracting Tips Tagged With: ACE, actual cost, Afghanistan, Army Corps of Engineers, Court of Appeals, FAR, flow down clause, subcontracting, Supreme Court, termination for convenience, U.S. Court of Appeals

Retired Air Force Master Sergeant sentenced to prison for disclosing confidential bid information

February 2, 2016 By Andrew Smith

Justice Dept. seal - CopyA retired U.S. Air Force Master Sergeant was sentenced last week in the U.S. District Court for the Southern District of Florida to 18 months in prison following his guilty plea to unlawfully disclosing confidential procurement information and filing a false tax return, announced Acting Assistant Attorney General Caroline D. Ciraolo of the Justice Department’s Tax Division.

According to court documents, Trevor Smith retired from the U.S. Air Force in December 2012 at the rank of Master Sergeant.  From February 2009 through February 2010, Smith was deployed to Afghanistan, where he served as Supply Non-Commissioned Officer-In-Charge for the Operation Enduring Freedom/Combined Security Transition Command-Afghanistan NATO Training Mission.  In that capacity, Smith met a Fort Lauderdale-based government contractor.  As part of his plea, Smith admitted that he agreed to disclose confidential bid information on government contracts to the contractor in exchange for bribe payments.  Smith and the contractor agreed that Smith would receive two percent of all revenues on contracts that the contractor received as a result of Smith’s assistance.

In January 2010, the contractor wired $42,853.29 to Smith.  The two agreed to wait until Smith returned to the United States for more payments.  After returning to the United States, Smith set up a shell corporation called T Star Air Inc. to receive 23 additional payments totaling $220,600.  Smith also created and submitted phony invoices to conceal the scheme.  For tax years 2010 through 2012, Smith filed corporate tax returns for T Star Air that falsely claimed inflated expenses and deductions.

In addition to the prison term, U.S. District Judge Beth Bloom for the Southern District of Florida ordered Smith to pay restitution to the Internal Revenue Service (IRS) in the amount of $6,501.

Source: http://www.justice.gov/opa/pr/retired-air-force-master-sergeant-sentenced-prison-disclosing-confidential-bid-information

Filed Under: Contracting News Tagged With: Afghanistan, Air Force, bid proposal, bid rigging, bribe, bribery, confidential, corruption, IRS, tax fraud

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