Georgia Tech Procurement Assistance Center

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

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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

Do federal supply schedule contracts still have value?

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Over the past several months, there has been a confluence of congressional and agency actions that will have a significant impact on Federal Supply Schedule (FSS) contract holders.

These changes are so significant that they will likely cause companies with FSS contracts to question whether having an FSS makes sense.

These changes could also cause companies to restructure the segments of their companies that are responsible for selling to the federal government.

Keep reading this article at: https://governmentcontractsnavigator.com/2018/03/22/do-federal-supply-schedule-contracts-still-have-value/

Are contractors worrying too much over GSA’s data rule?

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Many government contractors are worried, fearful and in disbelief about the General Services Administration’s implementation of its Transactional Data Rule.

There are calls for delays in implementation and more training for contracting officers and contracting specialists. There are worries that contracting officers will continue to ask for the dreaded, outdated, lawsuit inducing data that the TDR is supposed to replace — commercial sales practices (CSPs) and the price reduction clause disclosures.

And maybe most of all, industry is concerned about the cost to collect and transmit the data back to GSA.

Despite all of these fears, we know very little about the impact, cost or problems with GSA collecting transactional data, which it says is information generated when the government purchases goods or services from a vendor. The rule requires vendors to report specific details such as descriptions, part numbers, quantities and prices paid for the items purchased.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2017/02/contractors-worrying-much-gsas-data-rule/

SBA and GSA, OFPP not seeing eye-to-eye on ‘rule of two’ application

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SBA logoA major dispute is brewing in the small business community. Just four months after the Supreme Court’s June 16, 2016 unanimous decision on the Kingdomware case, the Small Business Administration (SBA) is taking a stand on the “rule of two” that is stressing out industry and agencies alike.

As a quick reminder, the nation’s highest court ruled in the Kingdomware case that the Veterans Affairs Department (VA) must continue to apply the “rule of two” for veteran-owned small businesses even if the agency surpassed its annual prime contracting goal. The “rule of two” states if an agency can find two or more qualified small businesses during market research of a contract under the Simplified Acquisition Threshold (SAT) — between $3,500 and $150,000 — it must set aside the solicitation.

Now the SBA is expanding that Supreme Court ruling to apply to all task and delivery orders under SAT if the request for proposals comes under the General Services Administration’s Schedules.

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/12/sba-gsa-ofpp-not-seeing-eye-eye-rule-two-application/

Here is a copy of the SBA’s memo telling its PCRs that the should apply small business preferences to all task orders and all delivery orders because they are considered contracts pursuant to the Kingdomware decision: http://www.wifcon.com/dgc_memo.pdf

GSA wants transaction-level purchasing data from contractors

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The General Services Administration (GSA) is changing the reporting requirements for federal contractors.

GSA Schedule ContractThe agency has formalized a new rule that requires vendors to report transaction-level data from orders on Federal Supply Schedule and governmentwide acquisition contracts, as well as indefinite delivery, indefinite quantity agreements.

Information gathered under the Transactional Data Reporting rule might include detailed descriptions, quantities and prices for items bought, according to a Federal Register notice.

The rule, which began with a pilot for FSS contracts over the summer, aims to help GSA analyze government spending patterns more broadly, according to the agency.

Keep reading this article at: http://www.nextgov.com/cio-briefing/2016/11/gsa-wants-transaction-level-purchasing-data/133235

GSA launches phase two of ‘Making It Easier’

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The General Services Agency launched the Making It Easier initiative in April to help government improve the way it buys good and services, and after a series of successful programs, the agency is ready for phase two.

making-it-easierLaunched on Oct. 24th, the next phase adds a slew of new efforts for both the contracting community and federal agencies. They include new quick-start guides designed to get prepare prospective contractors as they seek business across GSA’s many acquisition vehicles; a Multiple Award Schedule (MAS) Modification Improvement process designed to streamline changes in schedule solicitations; and restructured help desks that will give customers a single point of entry.

In addition, GSA planned to release a report describing the full scope of the “Making It Easier” initiative, its impact on stakeholders and prospects for fiscal 2017.

Keep reading this article at: http://www.nextgov.com/technology-news/2016/10/gsa-launches-phase-2-making-it-easier/132572

Oracle to leave GSA schedule: A signal of broader change?

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GSA logoOracle is leaving the General Services Administration’s schedules program. It’s not going to just stop selling directly through the IT schedule, but the software giant will no longer use third-party resellers either, according to multiple sources.

Let that sink in for a second. One of the largest software vendors in the world is telling GSA, thanks, but we can live without you.

Sources said Oracle decided the GSA schedules just weren’t worth the hassle any longer — the compliance requirements, the potential and real threats of False Claims Act lawsuits and the new Transactional Data Reporting (TDR) rule, all played into this decision.

“The federal market is a very small chunk of their business and while it seems big for us, when you look at someone like Oracle’s overall business, they have to expend an exorbitant amount of resources for little payoff,” said Jennifer Aubel, a principal with Aronson Consulting, who said she wasn’t familiar with Oracle’s decision. “With the TDR and even with not having to do price reduction clause reporting, a company like Oracle would still have to do monthly reporting and there is a lot of concerns, including how GSA will keep the data secure.”

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/09/oracle-leave-gsa-schedule-signal-broader-change/

Set-aside decision need not consider compliance with limitation on subcontracting

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GAO-GovernmentAccountabilityOffice-SealBefore deciding whether to set-aside a solicitation for small businesses under FAR 19.502-2, should the contracting officer first determine whether those small business will be able to provide the needed services while, at the same time, complying with the limitation on subcontracting?

No, according to a recent Government Accountability Office (GAO) bid protest decision. Instead, an agency’s determination whether a small business will comply with the limitation on subcontracting should be made as part of its award decision (following the evaluation of proposals), not during its initial set-aside determination.

Under FAR 19.502-2(b), a procurement with an anticipated dollar amount greater than $150,000 must be set-aside for small businesses where there is a reasonable expectation that offers will be received from at least two responsible small businesses and that award will be made at fair market prices. Though orders under Federal Supply Schedule (FSS) contracts (issued under FAR part 8.4) are exempt from these small business programs, a contracting officer nonetheless has discretion to set-aside FSS orders for small businesses.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/set-aside-decision-need-not-consider-compliance-with-limitation-on-subcontracting/

What vendors need to know about GSA’s new cyber offerings

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GSA Schedule ContractThe General Service Administration is introducing an additional step to evaluate cybersecurity vendors: an oral exam.

The agency last week posted a draft solicitation for Highly Adaptive Cybersecurity Services, four new IT Schedule 70 Special Item Numbers designed to offer agencies quick access for cyberattack prevention and remediation. The SINs include penetration testing, incident response, cyber hunt and risk and vulnerability assessment services, and the agency is on the hunt for “high-quality cybersecurity vendors.”

That’s where the oral technical evaluation comes in.

Keep reading this article at: http://www.nextgov.com/cybersecurity/2016/08/what-vendors-need-know-about-gsas-new-cyber-offerings/131016/

GSA seeks input from Schedule-holders on contract modification process

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GSA logoThe U.S. General Services Administration (GSA) is asking for feedback from GSA Schedule contractors on the contract modification process.

GSA’s Federal Acquisition Service (FAS) will use the industry input it receives to improve the GSA Multiple Award Schedules’ (MAS) modification process.

GSA explained that its industry outreach is part of its recently-launched Making it Easier Initiative which includes “improving the Multiple Award Schedule (MAS) modification process in order to make it easier for you, our MAS industry partners, to do business with the government.  We’ve heard your concerns, and want to make sure that your feedback on how to enhance the process is captured and taken into account.”

GSA Schedule contractors can provide comments by responding to the survey questionnaire at: https://docs.google.com/forms/d/1i0RX9FmMz56I1OY73k5VaxONDX7yiqQVHlVKlPV1kGw/viewform.

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