Georgia Tech Procurement Assistance Center

OIG: Beware of fraud ring scamming equipment by posing as federal buyers

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A transnational fraud ring is specifically targeting America’s federal procurement offices and vendors, according to an alert the Homeland Security Department’s Office of Inspector General issued this week.

Last July, the OIG discovered that members of a ring based in Atlanta, Georgia had posed as a Homeland Security procurement official to get their hands on computer equipment supplied by private vendors.  Diving deeper into the case, the IG found that the fraudsters were also stealing electronic equipment from other agencies including but not limited to the Commerce, Defense, Labor, Justice and Transportation departments.

“Some of the purchase orders identified were for hundreds of thousands of dollars each,” the OIG said.

In their scheme, the phony actors find federal government solicitations for equipment such as hard drives or smartphones, and send fraudulent requests for quotations to federal vendors from across the nation.  Though the RFQs use the legitimate names of procurement officials, the schemers use their own phone and fax numbers and they are also known to spoof government agency email addresses, using domain names such as “rrb-gov.us.”

Continue reading at:  Nextgov

Government shutdown costing private-sector contractors $245 million every day

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As it rounds up its third week, the partial government shutdown isn’t only affecting hundreds of thousands of federal employees. Contractors are potentially losing out on $245 million each day the shutdown continues, Bloomberg estimates.

Private-sector organizations that serve federal agencies including the Department of Homeland Security, the United States Agency for International Development and the Environmental Protection Agency have been told to stop work on certain contracts, with little indication as to what happens next, the Washington Post reports.

Homeland Security’s Federal Emergency Management Agency (FEMA) last week posted a “blanket” stop work order affecting scores of open contracts, the Post reports. “Any work done after receipt of this notice is at your own risk and will not be reimbursed,” Bobby McCane, FEMA’s head of contracting activity, wrote to federal contractors. “I thank you for your assistance during this funding lapse.”

Keep reading this article at: http://fortune.com/2019/01/07/u-s-government-shutdown-private-sector/

Defense companies starting to feel effect of the shutdown

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As the partial government shutdown moves into its third week, some American defense firms are starting to get multi-million-dollar IOUs instead of payments.

Even though Pentagon projects are unaffected — the Defense Department is already funded for fiscal 2019 — the shutdown is squeezing contractors who do work for NASA, the Department of Homeland Security, Federal Aviation Administration, and other federal agencies. Many companies aren’t getting paid, even as they continue to pay the salaries of employees shut out of closed government offices.

Take SAIC and Engility, two of the government’s largest service contractors. Executives for the soon-to-merge companies say the payroll for workers idled by the shutdown comes to $10 million every week. And just three weeks into the freeze, they say, the government is some $40 million to $50 million behind in payments.

Keep reading this article at: https://www.govexec.com/contracting/2019/01/defense-companies-starting-feel-effect-us-government-shutdown/154002

Military bought thousands of boots labeled ‘Made In the USA’ — but they were from China

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Five executives with a former leading manufacturer of U.S. military boots have been sentenced in federal court for saying the boots were made in Tennessee when they were actually produced in China.

According to an indictment filed in U.S. District Court, the actual Chinese manufacturer of the boots was told to include “USA” on the label of Wellco boot uppers that were then shipped to the U.S. The “Made in China” tags were removed, the indictment says. Soles were affixed to the boots at Wellco’s plant in Morristown, Tennessee, and elsewhere, according to the document.

From 2006 through 2012, the U.S. Department of Defense paid at least $138 million to Wellco for military footwear, according to the indictment.

Keep reading this article at: https://taskandpurpose.com/wellco-execs-military-boots-china/

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FEMA faulted for awarding undeliverable contracts, delaying aid during hurricane season

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The Trump administration last year awarded contracts to companies that were ill-prepared to help victims of three major hurricanes, according to a report from Senate Democrats, leading to canceled deals and delayed delivery of essential goods.

Minority party members of the Homeland Security and Governmental Affairs Committee, led by Sen. Claire McCaskill, D-Mo., reviewed Federal Emergency Management Agency contracts for emergency tarps and plastic sheeting, both of which FEMA deploys to storm victims with roof damage as temporary relief to help them remain in their homes. The subsequent report faulted FEMA for failing to properly vet vendors, leading the agency on multiple occasions to select companies that could ultimately not deliver the supplies.

FEMA awarded contracts to two companies that had “no relevant past experience” and were either created or registered as a federal contractor within months of receiving the award. In one case, the agency last October gave two contracts worth about $40 million to a Florida company, Bronze Star, to provide 600,000 emergency tarps and 60,000 rolls of plastic sheeting. In the other, FEMA awarded a $34 million contract to Global Computers and Networks that same month to provide an additional 500,000 tarps. The agency canceled the contracts in November for failure to deliver.

Keep reading this article at: https://www.govexec.com/management/2018/04/fema-faulted-awarding-undeliverable-contracts-delaying-aid-during-hurricane-season/147333

Why CDM vendors need more flexibility

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The first two phases of the Department of Homeland Security’s Continuous Diagnostic and Mitigation (CDM) program have helped government agencies deploy foundational cybersecurity solutions for real-time visibility and continuous network monitoring to identify vulnerabilities, reduce risk, ensure compliance and respond to threats.

DHS and the General Services Administration (GSA) deserve tremendous credit for implementing a technical program of this size and complexity. However, the first two phases barely bring government to the starting line of the cybersecurity technology race. The private sector and U.S. adversaries are already well past that point.

The most important phase of the CDM program is yet to come, under which government tackles the data security problems of an increasingly mobile workforce and distributed cloud computing environment.

Keep reading this article at: https://fcw.com/articles/2018/03/19/cdm-vendor-flex-comment.aspx

Industry seeks easy fixes to lengthy, redundant vetting process for DHS contractors

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Industry is pushing members of Congress to help the Homeland Security Department address a series of major roadblocks that companies have with the agency’s long, confusing and redundant process for vetting contractor personnel.

Most members of industry and Congress agree: the governmentwide security clearance process, which recently made its way back on the Government Accountability Office’s biennial High-Risk List, has its many challenges.

But the least DHS could do, industry said, is standardize and simplify the requirements it uses to determine whether contracting personnel are fit to work on behalf of the agency.

“We want them standardized,” Marc Pearl, president and CEO of the Homeland Security and Defense Business Council, said Tuesday at a hearing on the DHS vetting process.

Keep reading this article at: https://federalnewsradio.com/workforce/2018/02/industry-seeks-easy-fixes-to-lengthy-redundant-vetting-process-for-dhs-contractors/

Management of DoD contractor pleads guilty to ‘Made in the USA’ contract fraud

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The former president and CEO of Wellco Enterprises, Inc. (Wellco) and Tactical Holdings Operations, Inc. (Tactical Holdings), Vincent Lee Ferguson, of Knoxville, Tennessee, has pled guilty to conspiracy to commit wire fraud.

Wellco’s former sales VP, Matthew Lee Ferguson, of Geneva, Illinois, and former marketing director, Kerry Joseph Ferguson, of Houston, Texas, also pled guilty to conspiracy to commit wire fraud.  In addition, Wellco’s former VP of government contracting, Neil Streeter, of Warren, Massachusetts, and former operations manager, Stephanie Lynn (Ferguson) Kaemmerer, of Knoxville, Tennessee, pled guilty to smuggling goods into the United States.

Sentencing has been set for Vincent Lee Ferguson, Matthew Lee Ferguson, and Kerry Joseph Ferguson for June 6, 2018.  Sentencing for Neil Streeter and Stephanie Lynn Kaemmerer is set for June 11, 2018.  Conspiracy to commit wire fraud and smuggling goods into the United States both carry a maximum penalty of 20 years in prison and a fine of up to $250,000.  Each defendant was released pending sentencing.

According to information on file with the U.S. District Court, Wellco was a leading manufacturer and supplier of military footwear to the U.S. Department of Defense (DoD) and to civilian (commercial) customers for over 70 years.  From 2006 through 2012, DoD alone paid in excess of $138 million to Wellco for the supply of combat boots.  Wellco pioneered and patented the first practical method for molding and attaching a rubber sole to a shoe upper in a single operation.  During the Vietnam War, the U.S. Army adopted Wellco technology for the manufacture of its hot-weather boots for the jungles of Vietnam, a boot that became known as the “Vietnam Boot” or the “jungle boot.”   In May, 2007, in a deal involving approximately $22 million, Wellco was acquired by two investment firms, Golden Gate Private Equity, Inc. and Integrity Brands, Inc.  Wellco became a wholly owned subsidiary of Golden Gate’s portfolio company, Tactical Holdings.

In March 2006, Vincent Lee Ferguson was made President and CEO of Wellco.  At that time, he discussed a turnaround plan with Wellco’s Board of Directors for the company to increase commercial sales and “aggressively pursue” sales to the U.S. government.  From December 2008 through August 2012, he conspired with his executive team to import military-style boots that were made in China into the United States and then deceptively market and sell those boots to DoD (and other federal departments and agencies), government contractors, and the general public as “Made in the USA” and as compliant with the Berry Amendment and the Trade Agreements Act (TAA).   The Berry Amendment prohibits DoD from buying clothing that is not grown, reprocessed, reused or produced in the U.S.   The purpose of the Berry Amendment is to protect the viability of America’s textile and clothing production base.  The TAA provides that the government may acquire only “U.S.-made or designated country end products” and requires government contractors to certify that each “end product” meets applicable requirements.

By December 2008, Wellco was manufacturing certain military boot model uppers and insoles in China.  In order to conceal this fact, the conspirators required the Chinese manufacturing facility to include the American flag and “USA” on labels of certain boot uppers.  After two shipments of these deceptively marked boots were detained and seized by the U.S. Department of Homeland Security’s Customs and Border Protection, the conspirators ordered the Chinese facility to stitch tear-away “Made in China” labels in Wellco boot uppers.  After importation, the conspirators instructed Wellco factory workers in Morristown, Tennessee to tear out the “Made in China” tags prior to shipping the boots to government and commercial purchasers.

The defendants marketed and sold these Chinese-made Wellco boots as “Made in the USA.”  They also submitted false certifications to DoD and other federal agencies, and to government contractors that these boots complied with the Berry Amendment and TAA and met certain safety standards, including electrical hazard and blood-borne pathogen protections for U.S. troops.  For example, on August 15, 2012, the defendants submitted a signed “Certificate of Conformance” to a government contractor, representing that Wellco’s boot model S161 was “100% Berry Compliant” and “fully protective against Electrical Hazard,” even though the model was imported from China and not safety tested.  The boots were then supplied to troops stationed at Sheppard Air Force Base in Wichita Falls, Texas.   In total, Wellco sold at least $8.1 million of fraudulent boots.

This case was investigated by Homeland Security Investigations, Defense Criminal Investigative Service, Air Force Office of Special Investigations, General Services Administration Office of Inspector General, and Defense Contract Audit Agency.

Source: https://www.justice.gov/usao-edtn/pr/former-ceo-and-executive-management-defense-contractor-wellco-enterprises-inc-pleads

Contractors annoyed after DHS scraps $675 million cyber contract

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A trade group representing federal contractors says it is frustrated the Department of Homeland Security has left vendors in the dark after scrapping a 2-year competition for cybersecurity support jobs.

The explanation for the cancellation of the Cyber Centric Mission Support Services program, according to the Professional Services Council, had to do with DHS changing work requirements and needing less assistance. Little else is known about why Homeland Security called off the contract, says the group’s vice president, Alan Chvotkin.

A bidding war began in December 2013 among some 160 interested parties for the multiple-award venture worth up to $675 million.

The group said each team of contenders had spent hundreds of thousands of dollars preparing proposals for the 5-year contract that entailed responsibilities running the gamut from clerical work to technical assistance.

Keep reading this article at: http://www.nextgov.com/cybersecurity/2016/02/contractors-annoyed-after-dhs-scraps-675m-cyber-contract/126223

The link to Department of Homeland Security’s Acquisition Planning Forecast System is at: http://apfs.dhs.gov/ 

White House to buy office supplies in bulk to cut costs

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The same week President Obama will unveil his proposal to cut the national deficit, his White House will begin its own efficiency efforts — starting with office supplies.

Hoping to trim $600 million in the next four years, several federal agencies and departments will start pooling their purchases of office printers, copiers, and scanners, administration officials told The Washington Post.   Starting this week, the Departments of Commerce, Defense, Homeland Security, Justice,  and Treasury, as well as the Social Security Administration, are slated to begin  buying these items in bulk from 11 firms. The supplier list includes both larger companies like Canon and Lexmark, and some smaller, veteran- or  minority-owned suppliers, The Post reports.

This plan will also force departments to closely scrutinize their equipment stocks. “One of the things we’ve discovered is that agencies don’t have a clue what they have,” Dan Gordon, the Obama administration’s top federal contracting official, told The Post. “They don’t realize how many cellphones and BlackBerrys they have.”

Up next on the White House’s bulk-buying campaign: reining in spending on wireless service contracts. An additional $170 million could be saved annually if departments renegotiate their deals or merge several plans, according to Jeffrey Zients, the deputy director of the Office of Management and Budget.

— by Sara Sorcher – National Journal – September 19, 2011 – http://www.govexec.com/story_page.cfm?articleid=48826&dcn=e_tma

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