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Atlanta businessman indicted on 51 counts including bribery, tax evasion, and money laundering

March 7, 2019 By Nancy Cleveland

City of Atlanta contractor Lohrasb “Jeff” Jafari has been charged in a 51 count federal indictment with conspiratorial bribery, bribery, tampering with a witness, tax evasion, money laundering, and structuring.

“Jeff Jafari allegedly paid multiple bribes to two local officials over a period of years and then attempted to obstruct the federal investigation into his misconduct,” said U.S. Attorney Byung J. “BJay” Pak. “He also failed to pay income taxes on millions of dollars he earned from city contracts.  Instead, he used the funds to live a lavish lifestyle.  Whether you bribe, take a bribe, or otherwise misuse the public’s money to enrich yourself – it’s all corruption. We will vigorously pursue any such cases.”

According to U.S. Attorney Pak, the charges, and other information presented in court on March 6, 2019:

  • Beginning at least in 2014 to January 2017, Jafari allegedly paid thousands of dollars in bribe payments to Adam Smith, the then-Chief Procurement Officer of the City of Atlanta.
  • At the time, Jafari was the Executive Vice-President of PRAD Group and did millions of dollars in work with the City of Atlanta, primarily under the City’s Architectural and Engineering contracts.
  • Jafari and Smith met at Atlanta-area restaurants where they discussed City business, among other things, and Jafari would generally pay Smith $1,000 in cash in the restaurant bathroom.
  • Jafari similarly paid bribes to a local official in DeKalb County in April and August of 2014.

According to the U.S. Attorney’s office, in exchange for Jafari’s payments to Smith, Smith provided Jafari with information and counsel regarding the City of Atlanta’s procurement processes, among other information. When PRAD Group or a joint venture in which PRAD Group was a partner became a successful proponent on a City of Atlanta contract or Request for Proposal, Smith approved and submitted the award of those projects. Smith also approved task and/or purchase orders for those projects.

In February 2017, Jafari became aware of the federal investigation into his payments to Smith, at which time he confronted Smith in an effort to intimidate and persuade Smith to provide false information to federal law enforcement about the payments, instructing Smith to deny taking bribe money from Jafari.

Between 2014 through 2016, Jafari also willfully failed to pay income taxes to the IRS. During those years, Jafari withdrew large amounts of cash from corporate bank accounts and used corporate funds for personal expenses, among other things, to avoid the assessment of income tax. In 2014, Jafari owed at least $150,000; in 2015, at least $300,000; and in 2017, at least $700,000 to the IRS. Jafari is additionally charged with numerous counts of money laundering for engaging in financial transactions with funds earned from City of Atlanta work he obtained while he was paying bribes to Adam Smith.

Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.  This case is being investigated by the FBI and IRS Criminal Investigation.

Source: https://www.justice.gov/usao-ndga/pr/lohrasb-jeff-jafari-indicted-51-counts-including-bribery-tax-evasion-and-money

See federal indictment here: Jeff Jafari-Indictment-03.06.2019

See September 28, 2017 article about guilty plea by City of Atlanta purchasing chief here: https://gtpac.org/2017/09/28/city-purchasing-head-pleads-guilty-to-conspiracy-charge

Filed Under: Contracting News Tagged With: abuse, bribe, bribery, City of Atlanta, conspiracy, corruption, DOJ, Justice Dept., money laundering, pay-to-play, PRAD Group, state and local government, tax evasion, U.S. Attorney, witness tampering

Former City of Atlanta official indicted for bribery, money laundering, obstruction and tax fraud in connection with City contracts

April 6, 2018 By Nancy Cleveland

According to an April 5th statement released by the Office of the U.S. Attorney for the Northern District of Georgia, Mitzi Bickers has been arraigned on 11 federal charges including conspiring to commit bribery, wire fraud, money-laundering, federal obstruction and tax fraud.  Bickers was indicted by a federal grand jury on March 27, 2018.

“City of Atlanta contracts always should go to the most qualified bidder through a contracting process that is fair and transparent,” said U.S. Attorney Byung J. “BJay” Pak.  “Instead, Mitzi Bickers allegedly conspired to use her influence as a high-ranking City of Atlanta official and later as a connected political consultant to steer lucrative city contracts to Elvin R. Mitchell, Jr., Charles P. Richards, Jr., and their companies through bribery.  The illicit arrangement netted over $2 million in bribes for Bickers and almost $17 million in city contracts for Mitchell and Richards, and has shaken the public’s trust in the city’s contracting process.”

“The actions of Bickers, alleged in this indictment, traded the public’s trust in a fair bidding process for personal gain,” said David J. LeValley, Special Agent in Charge of FBI Atlanta. “The FBI and its partners in law enforcement will not tolerate those who choose to try to influence established and proper government procedures.”

“Public officials need to be reminded of the trust and duty bestowed upon them by the taxpayers to serve the public’s interest not their own,” said Thomas J. Holloman, Special Agent in Charge, IRS-Criminal Investigation.  “When public officials and those seeking to do business with them break this trust by committing fraud, they will be charged to the fullest extent of the law.”

According to U.S. Attorney Pak, the charges, and other information presented in court on April 5th:

  • As the City of Atlanta’s Director of Human Services and after leaving employment with the city, Bickers allegedly conspired with contractors Elvin R. Mitchell, Jr. and Charles P. Richards, Jr. to accept bribe payments for herself and other public officials in exchange for the her agreement to obtain city contracts for Mitchell’s and Richards’ companies.  Both Mitchell and Richards have pleaded guilty to paying bribes to Bickers and are currently serving federal prison sentences for their crimes.
  • In 2009, Bickers worked on the mayoral campaign and began working for the City of Atlanta after the election.  From February 2010 to May 22, 2013, Bickers served as the City of Atlanta’s Director of Human Services.  Beginning in 2010, Mitchell and Richards agreed to pay bribes to Bickers to secure profitable City of Atlanta contracts for their businesses.  At times, the bribe payments allegedly were referred to as “up-front money.” In reality, Mitchell and Richards often paid Bickers when their companies actually received City of Atlanta contract work.
  • In exchange for the bribe payments, Bickers promised to represent Mitchell, Richards and their companies on matters relating to City of Atlanta contracting, even though she was a high-level city employee at the time.  Bickers also allegedly provided Mitchell and Richards with sensitive contracting information during the critical time when they were bidding on city contracts.  Between 2010 and 2013, Mitchell’s and Richard’s companies received multi-million dollar contracts with the city for snow removal, sidewalk repair and maintenance, and bridge reconstruction.
  • In effort to conceal her relationship with Mitchell and Richards, Bickers allegedly filed numerous false City of Atlanta Financial Disclosure Forms.  For example, in 2011, Bickers swore under penalty of perjury that she had no financial relationships with any outside businesses, even though Mitchell’s and Richards’ companies paid her over $650,000 in that year.  She used much of this money to purchase a $775,000 lakefront home in Jonesboro, Georgia, making a down payment of over a half million dollars.  In that same year, Bickers also allegedly claimed on her taxes that she made only $57,896 as a city employee, resulting in a $3,924 tax refund from the IRS.
  • In 2013, Bickers’ financial ties to the Pirouette Companies came to light and Bickers resigned her position with the City of Atlanta.  After her resignation, Bickers, Mitchell, and Richards allegedly continued the bribery scheme.  For example, Bickers helped Mitchell secure a multi-million dollar contract for snow and debris removal work after a snowstorm locked down Atlanta in 2014.  In turn, Mitchell paid Bickers and companies associated with her hundreds of thousands of dollars in bribes.  Bickers spent the proceeds of the bribery at stores like Gucci and on expensive vacations, home renovations, four Yamaha WaveRunners, a sports utility vehicle and an ATV.  Bickers is also charged with money laundering for purchasing an SUV and four WaveRunners with bribery proceeds from an account held by the Bickers Group, which was her political consulting company.

Ultimately, between 2010 and 2015, Mitchell and Richards allegedly paid Bickers and companies associated with her over $2 million in an attempt get City of Atlanta contracts through bribery.  In this same period, the City of Atlanta paid Mitchell’s and Richards’ businesses approximately $17 million for the government contracts they secured.

In September 2015, Mitchell began cooperating with FBI’s investigation into corruption at City Hall.  On September 11, 2015 at approximately 5:30 a.m., Shandarrick Barnes threw a concrete block  reading “ER, keep your mouth shut!” through a plate glass window in Mitchell’s home.  Bickers is alleged to have played a role in this attempt to obstruct the federal investigation.  Barnes will be sentenced by District Court Judge Steven C. Jones on April 9, 2018.

Mitzi Bickers, 51, of Atlanta, Georgia, was arraigned before U.S. Magistrate Judge Russell G. Vineyard.  Members of the public are reminded that the indictment only contains charges.  The defendant is presumed innocent of the charges and it will be the government’s burden to prove the defendant’s guilt beyond a reasonable doubt at trial.

This case is being investigated by the FBI and Internal Revenue Service Criminal Investigation.

First Assistant U.S. Attorney Kurt R. Erskine and Assistant U.S. Attorney Jeffrey W. Davis are prosecuting the case.

Source: https://www.justice.gov/usao-ndga/pr/former-city-atlanta-official-indicted-federal-bribery-money-laundering-obstruction-and

Filed Under: Contracting News Tagged With: abuse, bribe, bribery, bribes, City of Atlanta, DOJ, FBI, fraud, indictment, IRS, Justice Dept., money laundering, obstruction, small business, tax fraud

Former Atlanta purchasing chief and former MARTA manager convicted of procurement bribery and theft

January 17, 2018 By Nancy Cleveland

The U.S. Attorney’s Office for the Northern District of Georgia announced, in separate cases, two convictions yesterday (Jan. 16, 2018) involving contracting bribes and kick-backs within two different units of metro Atlanta government.

  • Adam L. Smith, the former Chief Procurement Officer for the City of Atlanta, was sentenced to federal prison for conspiring to accept more than $40,000 in bribe payments from a vendor who obtained millions of dollars in city contracts.
  • Joseph J. Erves, former MARTA Senior Director of Operations, was sentenced to two years, nine months in federal prison for orchestrating a false invoicing scheme that resulted in MARTA paying more than $500,000 for maintenance work that was never performed and for then funneling most of that money into his personal bank accounts.

According to U.S. Attorney Byung J. “BJay” Pak, from at least 2015 to January 2017, Smith met privately with a vendor on multiple occasions, frequently at Atlanta-area restaurants. During these meetings, Smith and the vendor discussed Atlanta procurement projects, bids, and solicitations. Often at the time of these meetings, the vendor was actively seeking contracts, projects, and work with Atlanta.  After most of these meetings, the vendor and Smith met in the restaurant’s bathroom, where the vendor paid Smith approximately $1,000 in cash. In return for the bribe payments, the vendor expected Smith to use his position and power to assist the vendor with contracting/procurement with Atlanta and to furnish the vendor with future benefits and favors when needed.

In the case involving the Metropolitan Atlanta Rapid Transit Authority (MARTA), beginning in 2010, according to the U.S. Attorney’s office, Erves retained three different vendors purportedly to perform maintenance projects for MARTA. From approximately June 2010 to December 2016, Erves had fake invoices prepared on behalf of the three vendors for more than 40 maintenance projects for which no work was performed.  Erves then used the false invoices as bases to authorize payments to the three vendors.  In many cases, Erves personally approved payments to the vendors knowing that the vendors had not performed any work for MARTA.  After receiving payment, the three vendors funneled most of the money they received from MARTA into Erves’s personal bank accounts.  Subsequently, Erves used the money deposited into his accounts to pay personal expenses, such as multiple purchases at high-end department stores and the purchase of a Porsche 911.  Based on Erves’s authority and representations, MARTA paid the three vendors more than $500,000 for maintenance projects where no work was actually performed.

Smith, 53, of Atlanta, GA, was sentenced to two years, three months in prison, three years of supervised release, ordered to pay $44,000 in restitution, and a $25,000 fine.  On September 25, 2017, Smith pleaded guilty to conspiratorial bribery.  According to press reports, there is an ongoing investigation of matters related to the Smith case by the U.S. Attorney’s Office, the Federal Bureau of Investigation,  and the Internal Revenue Service.

Erves, 53, of Lithonia, GA, was sentenced to two years, nine months in federal prison, and ordered to pay $522,825.45 in restitution.  Erves also previously pleaded guilty (on August 24, 2017) to one count of Federal Program Theft.  The Federal Bureau of Investigation and the MARTA Police Department are continuing an investigation of this case.

Sources:

Statement from the U.S. Attorney’s Office regarding the Smith case: https://www.justice.gov/usao-ndga/pr/city-atlanta-s-former-chief-procurement-officer-adam-smith-sentenced-federal-prison 

Statement from the U.S. Attorney’s Office regarding the Erves case: https://www.justice.gov/usao-ndga/pr/senior-marta-executive-sentenced-federal-prison-causing-marta-pay-500000-work-never

Filed Under: Contracting News Tagged With: abuse, City of Atlanta, FBI, Federal Program Theft, fraud, IRS, MARTA, theft, U.S. Attorney

Man pleads guilty to obstructing justice in Atlanta contracting corruption investigation

November 7, 2017 By Nancy Cleveland

Shandarrick Barnes has pleaded guilty to obstructing justice in the federal corruption investigation involving City of Atlanta government.  The defendant threw a concrete block through the window of E.R. Mitchell’s home, and placed dead rodents on his porch and elsewhere hoping to thwart his cooperation with federal law enforcement.

“Barnes threw the concrete block through Mitchell’s dining room window to get him to ‘shut up,’” said U. S. Attorney Byung J. “BJay” Pak.  “Instead, that violent act made Mitchell even more resolute in his cooperation with federal law enforcement.  Barnes now faces a significant prison sentence because he decided to obstruct a federal investigation.”

“Attempts to subvert justice, whether through intimidation of witnesses or by any other means, will not be tolerated.  The FBI will expend any resources necessary to ensure that those who seek to obstruct criminal investigations are held accountable for their actions.  This plea by Shandarrick Barnes is evidence of the FBI’s commitment to protect those willing to cooperate with law enforcement’s efforts to improve their communities,”

“Individuals who obstruct justice will be held accountable for their actions. Intimidation of witnesses is never acceptable,” said James Dorsey, Acting Special Agent in Charge, IRS Criminal Investigation.  “This investigation was complex and multifaceted, and it underscores the reason we are committed to working with our law enforcement partners to dismantle any and all public corruption schemes.”

According to U.S. Attorney Pak, the charges, and other information presented in court:

  • In late July 2015, special agents with IRS and the FBI approached E.R. Mitchell for an interview relating to an ongoing investigation into corruption at the City of Atlanta.
  • During the meeting, agents discussed corruption allegations as well as potential tax improprieties.
  • Shortly after the IRS and FBI agents approached and interviewed him, Mitchell informed others that federal law enforcement had spoken with him and was asking questions.
  • Mitchell was interviewed on September 2, 2015, by the U.S. Attorney’s Office and FBI and IRS agents and confessed to regularly paying “up-front money” for City of Atlanta contracts.
  • On September 8, 2015, Mitchell returned to the office and completed a second debriefing with prosecutors and agents.
  • On September 11, 2015 at approximately 5:30 a.m., Shandarrick Barnes threw a concrete block with the words “ER, keep your mouth shut!” written on the side, through a plate glass window in Mitchell’s home.  When Mitchell emerged from the house to see who had thrown the block, he saw that dead rats had been placed on his porch, car and in his mailbox.  The police and FBI were summoned to the scene and law enforcement obtained security footage from the subdivision.  The video revealed a car that appeared to match Barnes’ vehicle left the area minutes after the block was thrown through the front window.  Further investigation by agents suggested that Barnes was involved.
  • On July 13 and August 17, 2016, Barnes was interviewed by the FBI and IRS.  During the interviews, he admitted he threw the concrete block through Mitchell’s window.  Barnes specifically acknowledged that he was aware of the IRS tax investigation into Mitchell and others and that agents had asked about Mitchell’s taxes as well as payments Mitchell made to businesses associated with Barnes’ employer.  He was well aware that Mitchell was actively cooperating with agents.  He said he was livid and his decision to throw the brick through Mitchell’s window was motivated by his desire to hinder Mitchell’s communication with agents concerning possible tax violations.  He said he felt that Mitchell’s communications to federal law enforcement would negatively affect his employer’s businesses.  Barnes was concerned that the communication with agents was detrimental to obtaining other business that he and others were actively seeking at that time.

Sentencing for Shandarrick Barnes, 41, of Atlanta, Georgia, is scheduled for February 7, 2018.  This case is being investigated by the Federal Bureau of Investigation.  Assistant U.S. Attorneys Kurt R. Erskine and Jeffrey Davis are prosecuting the case.

Source: https://www.justice.gov/usao-ndga/pr/man-pleads-guilty-obstructing-justice-city-atlanta-corruption-investigation

Filed Under: Contracting News Tagged With: bribe, bribery, City of Atlanta, corruption, FBI, investigation, IRS, local government contracting, obstruction, scandal, tax improprieties, U.S. Attorney

City purchasing head pleads guilty to conspiracy charge

September 28, 2017 By Nancy Cleveland

Adam L. Smith, the former Chief Procurement Officer for the City of Atlanta, has pleaded guilty to conspiring to accept more than $30,000 in bribe payments from a vendor who obtained millions of dollars in City contracts.

“Great trust was placed in Smith as Chief Procurement Officer for the City of Atlanta, and he abused his position to serve his own financial interests,” said U.S. Attorney John A. Horn.  “Public corruption offenses, like Smith’s, can erode the confidence that the people have in government.”

“The guilty plea of former City of Atlanta Procurement Officer Adams in federal court [on Sept. 26, 2017], will ensure that he is held accountable for his greed based criminal conduct as he now awaits sentencing. It is hoped that this case serves as notice to others that similar such conduct among public officials will not be condoned and that there are severe consequences should that notice go unheeded,” said David J. LeValley, Special Agent in Charge, FBI Atlanta Field Office.

“Public service is a public trust, requiring employees to obey laws and ethical principles above private gain.  Smith abused his public trust to enrich himself at a cost to the taxpayers,” said James E. Dorsey, Acting Special Agent in Charge, IRS Criminal Investigation. “We will continue to work with the FBI and U.S. Attorney’s Office in making these public corruption investigations a priority.”

According to U.S. Attorney Horn, the charges and other information presented in court, Smith served as the Chief Procurement Officer for the City of Atlanta from 2003 to February 21, 2017, overseeing the City’s purchasing activities and its expenditure of billions of dollars in public money for projects.

The conspiracy charge filed by Horn’s office refers to a “vendor” represented by an executive with a construction firm in Atlanta, but does not identify either the vendor or the executive by name.  During Smith’s tenure as the Chief Procurement Officer for the City, he awarded contracts worth millions of dollars to the vendor’s firm and joint venture projects of which the vendor was a partner.

From at least 2015 to January 2017, Smith met privately with the vendor on multiple occasions, frequently at local restaurants. During these meetings, Smith and the vendor discussed Atlanta procurement projects, bids, and solicitations. Often at the time of these meetings, the vendor was actively seeking contracts, projects, and work with Atlanta.

After most of these meetings, the vendor and Smith met in the restaurant’s bathroom, where the vendor paid Smith approximately $1,000 in cash.  In return for the bribe payments, the vendor expected Smith to use his position and power as Atlanta’s Chief Procurement Officer to assist the vendor with contracting/procurement with Atlanta and to furnish the vendor with future benefits and favors when needed.

Given his position, Smith was required to sign annually a financial disclosure statement certifying that he had not received more than $5,000 in annual income from any corporation, partnership, proprietorship, or other business entity other than Atlanta.  Additionally, under Atlanta’s Procurement Code, Smith also had to “make a written determination as to the existence” of any “personal or organizational conflicts of interest exist” between vendors and Atlanta before awarding a vendor a solicited contract. Similarly, Atlanta’s Procurement Code mandated that Smith “certify to the City Council” that the winning vendors had disclosed to Atlanta any “organizational and personal relationships” and that the “award of the contract [was] appropriate.”

Furthermore, in exchange for those cash payments:

  1. Smith met with the vendor on a regular basis;
  2. Smith provided the vendor with information and counsel regarding Atlanta’s procurement processes (among other information);
  3. When the vendor’s firm or joint venture became the successful bidder on an Atlanta contract or request for proposal, Smith approved and submitted the award of such procurement projects or bids to Atlanta’s mayor and City Council for final authorization;
  4. Smith never disclosed his ongoing financial relationship with the vendor and/or the vendor’s firm on his Financial Disclosure Statements to Atlanta; and
  5. Smith never advised Atlanta’s City Council that the vendor’s firm or joint venture had failed to disclose its organizational and personal relationships with him.

In total, from at least 2015 to January 2017, the vendor paid Smith more than $30,000 in cash.

Adam L. Smith, 53, pleaded guilty to conspiratorial bribery.  Sentencing is scheduled for Jan. 16, 2018, before U.S. District Judge Steve C. Jones.

The Federal Bureau of Investigation and Internal Revenue Service Criminal Investigation are investigating this case.

Source: https://www.justice.gov/usao-ndga/pr/city-atlanta-s-former-chief-procurement-officer-adam-smith-pleads-guilty-taking-bribes

See federal conspiracy charge here: Conspiracy Charge – Adam Smith – 09.26.2017

Filed Under: Contracting News Tagged With: abuse, bribe, bribery, City of Atlanta, conspiracy, corruption, pay-to-play, state and local government

GDOT audit finds flaws in disadvantaged business certification process

December 3, 2012 By ei2admin

An audit completed amid concerns about airport contracts found flaws in the Georgia Department of Transportation’s process to certify businesses with “disadvantaged” status for government contracts. The internal audit discovered calculation errors in more than two-thirds of the sampling of applications it reviewed.

The findings of the audit raise questions about the disadvantaged business certification process GDOT had been using, but it’s not clear how many of the applicants reviewed went on to win contracts.

The “disadvantaged business enterprise” certifications give firms special consideration, since agencies set goals to award a certain percentage of contracts to disadvantaged firms.

Keep reading this article at: http://www.ajc.com/news/business/gdot-audit-finds-flaws-in-disadvantaged-business-c/nTHtQ/.

Filed Under: Contracting News Tagged With: airport concessions, audit, certification, City of Atlanta, DBE, DOT, FAA, FHWA, GDOT, net worth, small disadvantaged business

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