Georgia Tech Procurement Assistance Center

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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DHS logoA 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

Contractors ordered to post DOD fraud hotline info

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Make room on the bulletin board near contractor coffee makers and break rooms.

The Defense Department now requires its defense contractors to post the DOD inspector general’s fraud hotline posters in common work areas. The rule took affect Sept. 16, according to a notice in the Federal Register the same day.

The DOD IG didn’t think the old rules went far enough because the Federal Acquisition Regulation allowed a contractor to not post any other agency’s hotline numbers other than those of the Homeland Security Department if the company had its own business ethics program with a means of reporting fraud or waste.

However, the DOD IG believes the FAR might be limiting the use of its own hotline. Without a poster, an employee wouldn’t know the IG’s phone number.

“According to the DOD IG, some contractors’ posters may not be as effective as the DOD poster in advertising the hotline number, which is integral to the fraud program,” the notice explained. The DOD IG is also revising its poster to tell employees of federal whistleblower protections.

The rule amends the Defense Federal Acquisition Regulation Supplement, or DFARS.

In response to the proposal in May, some experts were concerned that the new hotline posters could replace the contractor as the first line of defense against waste and fraud. It would also get the IG involved in what often turns out to be human resource issues or concerns about day-to-day activities that may need immediate attention.

But the IG said its staff knows the difference between an urgent matter about a defense contract and a routine personnel issue.

The rule applies to contracts and subcontracts that exceed $5 million. It does not apply to purchases of commercial items or for work that will be performed entirely outside the United States if the contract exceeds $5 million.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Washington Technology.  This article appeared on Sept. 19, 2011 at http://washingtontechnology.com/articles/2011/09/19/dod-ig-required-fraud-hotline-posters.aspx?s=wtdaily_200911.

Former federal contractor gets jail time for falsifying immigration records

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A former contractor working as a records custodian at U.S. Citizenship and Immigration Services has been sentenced to five and a half years in jail for doctoring computer files to help illegal aliens obtain “legal” passports, Justice Department officials announced this week. The case reflects a larger problem the agency has experienced with personnel who have manipulated computer systems at various USCIS centers, according to internal documents and a former information technology manager. Federal investigators recently discovered that plans for an ongoing project to computerize the processing of immigration forms, which is supposed to enhance fraud detection, failed to address insider threats.

According to federal district court papers reviewed by Nextgov, Richard Abapo Quidilla, 39, of Pico Rivera, Calif., deleted the names, birth dates and other personal data of naturalized citizens in a secure database and substituted the corresponding information of illegal immigrants. He pleaded guilty in March to charges of computer fraud, procurement of citizenship unlawfully and aggravated identity theft, U.S. Attorney Laura E. Duffy said.

During the time Quidilla perpetrated the crimes, between Dec. 31, 2009, and Oct. 28, 2010, he was under contract with Dell Perot Systems at the USCIS San Diego office, according to the plea agreement. The government assigned him a user identification code to access the system he admitted to tampering with. Quidilla then assigned the alien registration ID numbers of nearly 30 naturalized citizens to about 30 illegal immigrants in a way that would trick anyone searching the database using the immigrants’ personal information to believe they were naturalized.

At least two illegal immigrants used their false ID numbers and citizenship statuses to get passports, according to the plea. One of them paid Quidilla at least $1,300 for cribbing the information; the other gave him at least $4,100.

When asked whether Quidilla obtained the proper clearances and passed background checks to manage immigration records, Lori Haley, an Immigration, Customs and Enforcement spokeswoman, said she could not comment because the incident is under investigation at ICE.

Quidilla’s supervisors did not know he posed a risk, Dell officials said. “Dell had no knowledge of the former employee’s criminal behavior prior to his arrest,” company spokeswoman Caitlin Carroll said. “Dell holds its team members to the highest standards, and has a zero-tolerance policy for unethical behavior.”

This is not the first time USCIS employees have orchestrated citizenship scams — and auditors are warning that a troubled $2.4 billion project to automate immigration paperwork lacks controls to guard against future internal wrongdoers, according to a report released earlier this year by the Homeland Security Department Inspector General’s Office.

Frank Deffer, assistant IG for information technology audits, listed the initiative, called Transformation, and its susceptibility to insider threats as among the “most prevalent, high-impact areas of concern” in an assessment of steps the agency is taking to protect IT systems and data against unauthorized use by employees and contractors. “Insiders at USCIS have perpetrated fraud in the past,” his audit stated. “USCIS insiders are capable of granting legal residency or citizenship status to someone who poses a national security risk to the United States.”

Separately, a serious incident report obtained by Nextgov shows, in 2008, USCIS officials discovered that employees within the Fraud Detection and National Security Directorate — hired to ensure dangerous individuals do not receive immigration rights — hooked up a nongovernment computer to an external Internet connection at a Vermont center that handles visas for victims of violence and human trafficking, allowing staff to potentially extract or import data to commit identity theft.

Spokesman Christopher Bentley said the overwhelming majority of USCIS staff perform their jobs honestly and with a deep commitment to public service.

“USCIS demands that our employees maintain the highest level of integrity and professionalism,” he said. “USCIS has zero tolerance for criminal activity and employee misconduct, and will take appropriate action to pursue illegal or unethical activity by every means at our disposal.”

— by Aliya Sternstein – NextGov – 06/02/11 – http://www.nextgov.com/nextgov/ng_20110602_9794.php?oref=rss?zone=NGtoday

FEMA didn’t award contracts on merit, report says

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The Federal Emergency Management Agency may have violated federal law by trying to distribute contract dollars equally among three firms, rather than selecting the most qualified candidate, according to a new report commissioned by the Department of Homeland Security.

In the report dated October but released earlier this month, independent public accounting firm Foxx & Co. found that FEMA may not be complying with the Brooks Act, which requires that the government select engineering and architectural firms based on competency, qualifications and experience. Additionally, the report said that FEMA neither established performance standards for its contractors nor evaluated their performance.

The agency in 2006 awarded contracts to three companies to provide technical assistance, such as engineering services or environmental expertise, to government or nonprofit groups that had received disaster response funding. Irving, Tex.-based Fluor, Arlington-based Emergency Response Program Management Consultants and Gaithersburg-based Nationwide Infrastructure Support Technical Assistance Consultants were all selected to receive future task orders over a five-year period.

Auditors reviewed nine different task orders awarded to the contractors for services provided in response to hurricanes Gustav and Ike in Texas and Louisiana and flooding in Iowa, all in 2008. The contractors received more than $165 million for their work on the disasters, according to the report.

Though the base contract awards complied with the Brooks Act, the audit found no documentation to indicate FEMA had discussions with the three firms before awarding a given task order.

“Without an evaluation of qualifications, questions arise whether FEMA may be using a less qualified contractor to do the work,” the report said. “In addition, a contractor may have already been in place at a disaster location, been more qualified and familiar with the community and issues, and thus could have been a better resource and responded more quickly.”

Auditors recommended the agency seek the Justice Department’s opinion, but FEMA said it is working with the Homeland Security general counsel’s office, which will go to the Justice Department if necessary.

The report also called for FEMA to establish performance expectations and assess contractor performance. FEMA is now developing an evaluation worksheet, a draft of which was distributed to regional divisions in August for their review.

“Without performance expectations or adequate monitoring or evaluations, there is no assurance that the federal government and the state and local entities are receiving the expected . . . contractor services,” auditors added.

Indeed, the report finds that in three task orders it examined, FEMA employees reported having trouble getting the needed technical assistance from the contractor. The report contends that the lack of established expectations and evaluations means the government cannot determine whether it received a fair return on its investment.

— By Marjorie Censer – The Washington Post – Monday, November 22, 2010; page 10

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