Georgia Tech Procurement Assistance Center

Revolving door between Pentagon and defense contractors continues to spin

By

Almost two years after Donald Trump came to Washington pledging to “drain the swamp” of special interests and clear waste from the Pentagon’s supply chain, a steady stream of retired generals, admirals and government procurement officers are still accepting lucrative positions with companies that do business with the military.

A report released Nov. 4th by the advocacy group Project on Government Oversight (POGO) found that major U.S. defense contractors have hired hundreds of former high-level government officials in recent years, including at least 50 since Trump became president. The report lends new visibility to long-standing concerns about a revolving door between the government agencies that award massive contracts for military supplies and services and the businesses that profit from those contracts.

Corporate influence in Washington was a campaign trail rallying point for Trump, who said soon after the 2016 election that there should be a “lifetime restriction” on top defense officials going to work for defense contractors. “The people that are making these deals for the government, they should never be allowed to go work for those companies,” he said on Fox News.

Keep reading this article at: https://www.stripes.com/news/us/revolving-door-between-pentagon-and-defense-contractors-continues-to-spin-1.555340

Contractor forfeits $1.7 million in assets, pleads guilty to delivery of cheap versions of products

By

Jim A. Meron, owner of California-based WOW Imaging Products LLC and Time Enterprises LLC, has pled guilty to wire fraud related to a procurement fraud scheme involving the General Service Administration (GSA) Federal Supply Schedule program and a Department of Defense (DoD) electronic ordering system.

According to court documents, between May 2011 and July 2017, Meron used his two office supply businesses to defraud federal government agencies out of as much as $3.5 million — involving thousands of transactions — by substituting and delivering cheaper, generic versions of expensive, name-brand products his customers ordered, and pocketing the price difference. As part of his plea, Meron agreed to forfeit more than $1.7 million in assets seized during the investigation of his crimes.

Meron’s companies contracted to sell office supplies to federal agencies through two web-based government sales portals, GSA Advantage and DoD eMall.  After Meron received payments for the premium products his customers ordered, he obtained compatible products from his suppliers that cost him a fraction of what his customer paid for the brand-name products they ordered.  Meron then substituted and delivered those cheaper products for the more expensive products his customers ordered, and retained the difference in cost.  Over time, Meron extended his substitution scheme to nearly all orders for those name-brand products, and never intended to deliver what his customers ordered.

This case is the product of an investigation by GSA’s Office of Inspector General and the Defense Criminal Investigative Service.

Meron is scheduled to be sentenced on February 4, 2019.  Meron faces a maximum statutory penalty of 20 years in prison and a $250,000 fine on each count of conviction. The actual sentence, however, will be determined at the discretion of the court after consideration of any applicable statutory factors and the Federal Sentencing Guidelines, which take into account a number of variables.

Source: https://www.justice.gov/usao-edca/pr/granite-bay-man-pleads-guilty-multi-million-dollar-product-substitution-fraud-federal

DISA only wants tailored pitches from vendors

By

The Defense Information Systems Agency — the warfighter’s IT shop — is very interested in hearing what solutions and capabilities industry has to offer, but only in the context of how those technologies can be applied to the military’s specific needs.

“We tend to break capabilities that work in industry. I’ve seen it time and time again over the years,” Dave Bennett, director of DISA’s Operations Center, said last week during the annual Forecast to Industry.  “If you come in and you try to sell me on widget XYZ and you want to cite a scenario where you used it in industry … I will zero my mind out. I will be singing ‘la-la-la’ in the back of my head. Because what you did in industry, nine times out of 10 will not apply in my space.”

Instead, Bennett urged vendors to come armed with specific knowledge of the DISA environment they’re looking to support and a direct pitch on how their solution would benefit the agency and the warfighter.

Keep reading this article at: https://www.nextgov.com/cio-briefing/2018/11/disa-only-wants-tailored-pitches-vendors/152587/

GDEcD produces videos on how to use GDX to identify DoD contract opportunities

By

The Georgia Department of Economic Development (GDEcD) has produced a series of three videos which consist of step-by-step tutorials on how to use the Georgia Defense Exchange (GDX) to find and win defense contracts.

In the videos, you’ll see three ways to use GDX:

  1. Use the Opportunities module to find contract opportunities perfect for your business; and save each opportunity so you can easily return to it in the future.
  2. Use the Contract History module to research contracts that will expire soon, so you can prepare to bid on the new contract.
  3. Use the Opportunities module to research pre-solicitations or sources sought to find trends in future needs.

To view the videos, click here.

To register to begin using GDX at no charge, click here. 

Note: The Georgia Defense Exchange (GDX) does not support Internet Explorer.  Please use Google Chrome, Firefox, or Safari to access the site.

 

DoD to limit use of ‘Brand Name or Equal’ contract competitions

By

The Department of Defense (DoD) has proposed a new rule limiting the use of “brand name or equal” contract competitions, calling on contracting officers to publicly justify their need for a brand name-type product before issuing a solicitation.  The rule would implement Section 888(a) of the National Defense Authorization Act of 2017, which directed the Secretary of Defense to “ensure that competition in [DoD] contracts is not limited” by brand name references without a justification under 10 U.S.C. § 2304(f).

Background

Federal procurement law requires agencies to draft competitive solicitations that describe the Government’s needs generally, rather than referencing a specific type of product.  However, “under certain circumstances,” agencies may request a specific brand name product or its equal.  An off-brand product is “equal” if it shares the same the same salient characteristics as the brand name product. 

Contractors have at times challenged, through pre-award bid protests, agency decisions to reference a brand name product as unfair and unduly restrictive of competition, contrary to the Competition in Contracting Act of 1984’s (CICA) requirement for full and open competition.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2018/11/whats-in-a-brand-name-dod-to-limit-use-of-brand-name-or-equal-contract-competitions/

U.S. defense contractors report that business is booming — thanks to new spending, lower taxes

By

The U.S. defense industry is on track for one of its best years in recent memory.

The five largest U.S. defense contractors — Lockheed Martin, Boeing, Northrop Grumman, Raytheon and General Dynamics — reported healthy financial results for the third quarter, in a series of earnings reports over the past week.

They benefited from a defense budget that has grown significantly under a Republican-controlled Congress and White House, as well as a 2017 tax overhaul that slashed their corporate tax rates.

“We’re seeing more and more signs of sustained long-term stable defense budget in the U.S.,” Boeing chief executive Dennis Muilenburg said Wednesday.

They have also taken advantage of a more stable budget environment that has made it easier for them to prepare for the future. Last year, Congress lifted the “sequestration” budget caps that have limited defense spending since 2013. For the first time in years, lawmakers passed their most recent spending bill without a “continuing resolution,” giving defense firms a better blueprint for their future sales.

Keep reading this article at: https://www.washingtonpost.com/business/2018/10/26/us-defense-contractors-report-that-business-is-booming-thanks-new-spending-lower-taxes

Revisions coming for NIST’s data protection guide, will address ‘advanced’ cyber threats

By

The National Institute of Standards and Technology (NIST) is planning to issue a draft second revision to its guidelines for controlled unclassified information handled by the Defense Department and government contractors, in order to better address “advanced persistent threats,” according to a key NIST official.

The upcoming draft revisions are based on recent assessments that information critical for national security requires “enhanced” protections, the NIST official said at a public meeting updating industry and government officials on the data requirements at NIST headquarters on Oct. 18, 2018.

NIST’s Ron Ross said a draft revision to NIST guideline 800-171 would be issued before the end of the year for public comment. The revisions are “just in the planning stages this week” and a formal announcement will be issued soon. Ross said the enhanced requirements would be proposed for comment as an appendix to the overall document to offer additional protections beyond “basic” controls outlined in chapter three of the guidelines.

The NIST guidelines are the basis for Defense Federal Acquisition Regulation Supplement, or DFARS, for cybersecurity risks issued in 2017 and still being implemented by DOD.

Keep reading this article at: https://insidedefense.com/insider/nist-official-revisions-coming-data-protection-guide-will-address-advanced-cyber-threats

See GTPAC’s video, template and other resources designed to help contractors comply with the DoD/NIST cybersecurity rules at: http://gtpac.org/cybersecurity-training-video/

DoD makes supply chain risk management a permanent performance metric

By

On Sept. 19, 2018, the U.S. Department of Defense (DoD) issued a corrected Class Deviation 2018-O0020, to remove the sunset provision in DFARS 239.73, “Requirements for Information Relating to Supply Chain Risk,” that was due to expire on Sept. 30, 2018. The deviation is effective immediately.

This new deviation implements Section 881 of the National Defense Authorization Act (NDAA) for Fiscal Year (FY) 2019. Section 881 made the requirements for supply chain risk management under DFARS 239.73 permanent by placing its authority under a statute (10 U.S.C. § 2239a). This reauthorization reflects the continual efforts by Congress and the DoD to increase oversight on contractors supply chain and use risk management as a metric for contract performance.

DFARS Subpart 239.73, along with its contract clauses DFARS 252.239-7017 and DFARS 252.239-7018, places a significant onus on contractors to investigate its own supply chain to minimize and mitigate any perceived security risks. Failure to meet the requirements of the regulations creates significant risk to a contractor.

  • First, there is an explicit requirement in DFARS 252.239-7018 requiring contractors to actively mitigate supply chain risk during performance of the contract. However, the clause provides no additional information or standard to what is considered adequate mitigation.
  • Second, there is an implicit incentive for contractors to ensure that their supply chain is risk-free because the contractor is not the only entity to investigate risks in its supply chain. DFARS 252.239-7018 provides the government with an incredible oversight capability by permitting it to consult both public and non-public information, including all-source intelligence, to determine whether a contractor’s supply chain creates a risk.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=743224

Cybersecurity compliance: A key to future DoD contract awards

By

In a recent address at the Air Force Association’s Air, Space & Cyber Conference, Deputy Secretary of Defense Patrick Shanahan emphasized that cybersecurity will become a “critical measurement” for making contract awards as well as a significant consideration in holding a government contractor accountable for its performance.

Shanahan noted that while DoD acquisitions currently focus on three critical measurements—quality, cost and schedule—cybersecurity is “probably going to be what we call the . . . fourth critical measurement.” The DoD is “going to work with [its] industrial partners to help them be as accountable for security as they are for quality.”

Shanahan also noted that adequate cybersecurity protection is part of the standard baseline of government contracting security—it is not an optional feature. He commented, “And it shouldn’t be that being secure comes with a big bill. It’s just like we wouldn’t pay extra for quality.” Consequently, government contractors should recognize that the government “shouldn’t pay extra for security,” he added. Rather, “security is the standard. It’s the expectation. It’s not something that’s above and beyond what we’ve done before.”

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=742094

See GTPAC’s video, template and other resources designed to help contractors comply with the DoD/NIST cybersecurity rules at: http://gtpac.org/cybersecurity-training-video/

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

By

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

Contracting News

Read More

Contracting Tips

Read More

GTPAC News

Read More

Georgia Tech News

Read More