Georgia Tech Procurement Assistance Center

North Carolina couple sentenced for fraudulently claiming veteran and 8(a) small business status

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Justice Dept. seal - CopyRicky A. Lanier and his wife Katrina R. Lanier, both of LaGrange, N.C., have been sentenced to serve federal prison terms of 48 months and 30 months, respectively, for conspiracy to commit wire fraud, wire fraud, and major fraud against the United States. The couple were found guilty of these offenses on Dec. 17, 2015, following a 13-day jury trial in U.S. District Court. Their sentence was announced on Oct. 3, 2016.

According to evidence presented at trial, the Laniers conspired from November 2005 to April 2013 to defraud the government through a scheme to fraudulently obtain federal contracts intended to be awarded to businesses lawfully participating in the Department of Veterans Affairs’ (VA) Service-Disabled Veteran-Owned Small Business (SDVOSB) program and the Small Business Administration’s (SBA) 8(a) Business Development program.  Specifically, they falsely represented that JMR Investments was eligible as an 8(a) business and that Kylee Construction was eligible as an SDVOSB and an 8(a) business.

Ricky Lanier, who had previously owned and operated an 8(a) business receiving government contracts, became ineligible to participate in the 8(a) program after that business graduated from that program in 2008.  Lanier used a friend and service-disabled veteran as the purported owner of Kylee Construction, representing that the friend was involved in the daily management of the business, even while the friend was working for a government contractor in Afghanistan.  The Laniers used a business, JMR Investments owned by Ricky Lanier’s college roommate, as a front to obtain construction contracts from the National Park Service and other federal agencies under the 8(a) program, misrepresenting the friend’s involvement in the management and operation of the business.  The scheme also involved subcontracting out all or almost all of the work on the contracts in violation of program requirements.

Ricky Lanier also defrauded the National Park Service in connection with a contract to replace a wastewater treatment facility at the Tremont Institute in the Great Smoky Mountains National Park, falsely representing subcontractor costs by over $400,000, resulting in the award of a $1.1 million contract for work on the project that was actually performed by a subcontractor for only $550,000.  Lanier also fraudulently obtained a $1.3 million construction contract at the James H. Quillen VA Medical Center which had been set aside for SDVOSBs.

As a result of the false representations, Kylee Construction was awarded over $5 million in government contracts and JMR Investments was awarded over $9 million in government contracts. The Laniers received almost $2 million in financial benefit from the scheme, using accounts of the shell companies for payment of personal expenses.

Law enforcement agencies participating in the joint investigation which led to indictment and subsequent conviction of Ricky and Katrina Lanier included the VA-Office of Inspector General (OIG), SBA- OIG; and Department of the Interior, OIG, with assistance from the U.S. Secret Service.  Former Assistant U.S. Attorney Neil Smith and Assistant U.S. Attorney David L. Gunn represented the United States.

Source: https://www.justice.gov/usao-edtn/pr/north-carolina-couple-sentenced-government-contract-fraud

Indian-owned businesses should see more procurement contracts under new ‘Buy Indian’ policy

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Buy Indian ActThe U.S. Department of the Interior’s Bureau of Indian Affairs (BIA) on Jan. 12, 2016, announced a new policy to improve the implementation of the Buy Indian Act of 1910 (Act). The policy, announced in a memorandum by Acting Deputy Assistant Secretary – Indian Affairs (Management) James Burckman, comes in response to a U.S. Government Accountability Office (GAO) report, released in July 2015, that criticized the federal government’s enforcement of the Act.

The Buy Indian Act authorized certain federal procurement contracts to be set aside for preferential awards to Indian Economic Enterprises (IEEs) for all procurement contracts issued by the BIA, the Bureau of Indian Education (BIE), the office of the Interior Assistant Secretary – Indian Affairs (AS-IA) and the Indian Health Service (IHS). In 2013, regulations were issued that defined IEEs as those companies which are at least 51 percent Indian-owned.

While the BIA and IHS have obtained services and supplies from IEEs under the Act since 1965,the GAO found that Buy Indian procurements have comprised only a small percentage of BIA and IHS annual contract obligations, the result of limited knowledge and implementation of the set-aside in regional or area offices where contracts are often awarded.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=461952

Business owner sentenced for fraudulently obtaining $2.6 million in government contracts

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Yogesh K. Patel, age 48, of Gaithersburg, Maryland, was sentenced August 3, 2015 to 21 months in prison followed by three years of supervised release for conspiring to commit wire fraud in connection with a scheme to fraudulently obtain more than $2.6 million in federal government contracts through a Small Business Administration (SBA) program designed to assist disadvantaged businesses.  Patel also was ordered to forfeit $554,541.07.

SBA logo smallAccording to his plea agreement and court documents, Patel owned 91% of United Native Technologies, Inc. (UNTI), which purported to perform information technology services to the government and commercial clients.  In 2005, Patel applied for and was granted certification as a socially and economically disadvantaged owned business under SBA’s program.  In addition to a broad scope of assistance from SBA, participants in the program can receive sole source government contracts that are reserved for socially disadvantaged owned companies.

In 2007, Patel met co-defendant Wesley Burnett at a business conference in Costa Rica. Burnett, who was not a member of any economically or socially disadvantaged group, had experience constructing and maintaining barriers at military and government installations.  Patel and Burnett agreed that they would use UNTI to bid on SBA set aside contracts for barrier-related work. Burnett would perform the work under the contracts and would pay Patel 4.5 percent of the value of the contracts. In preparing a bid for a contact at Andrews Air Force, which was ultimately awarded to UNTI, Burnett and Patel exchanged emails in June 2011 in which they made statements indicating that they knew this arrangement was illegal.

In 2011, Patel met another individual identified as N.P., and they agreed to a fraudulent pass-thru arrangement similar to the one Patel had entered into with Burnett.

From October 2010 to July 2013, UNTI was fraudulently awarded $2,682,430 in set-aside U.S. government contracts.

In 2011, 2012 and 2013, Patel falsely certified to the SBA that no outside entity or individual provided financial support to UNTI when in fact Burnett and N.P. provided financial support to UNTI; and that Patel ran UNTI full-time, when in fact he did not because he was receiving disability compensation from the Social Security Administration in each of those years.

From November 2012 to October 2013, Patel received $973,407.37 in government funds under the fraudulently obtained set-aside contracts.  Patel kept a portion of these funds and turned the majority of them over to Burnett.  Prior to November 2012, payments under contracts went to Burnett, who provided a portion of the funds to Patel.

Wesley Burnett, age 46, of Hermosa Beach, California, previously pleaded guilty to his role in the scheme.  Burnett was sentenced to 42 months in prison and ordered to forfeit $694,893.99.

The National Procurement Fraud Task Force was formed in October 2006 to promote the early detection, identification, prevention and prosecution of procurement fraud associated with the increase in government contracting activity for national security and other government programs.  The Procurement Fraud Task Force includes the United States Attorneys’ Offices, the FBI, the U.S. Inspectors General community and a number of other federal law enforcement agencies. This case, as well as other cases brought by members of the Task Force, demonstrates the Department of Justice’s commitment to helping ensure the integrity of the government procurement process.

The SBA’s Office of Inspector General (OIG), the U.S. Air Force Office of Special Investigations, and the Department of the Interior’s OIG participated in the investigation.

GAO doubles down on FedBid ruling

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The GAO has sustained a second protest based upon FedBid’s suspension of a contractor from its system.

For the second time in less than one week, the GAO held that the contractor’s suspension from FedBid–and resulting inability to bid on a contract–was improper because the matter was not referred to the SBA under the SBA’s Certificate of Competency procedures.

GAO-GovernmentAccountabilityOffice-SealThe GAO’s decision in Latvian Connection, LLC, B-410981 (April 6, 2015) involved a Department of the Interior RFQ for the fabrication and installation of mobile shelving system components.  The procurement was conducted through FedBid’s electronic reverse auction system.

Latvian Connection, LLC, wished to compete for the award.  However, in July 2014, FedBid suspended Latvian Connection’s FedBid user account.  The FedBid suspension notice stated, in part: “System and Business Integrity: Latvian Connection has taken actions to repeatedly and purposely interfere with FedBid’s business relationships.”

Since Latvian Connection’s FedBid account was suspended, it was unable to compete for the procurement.  Latvian Connection filed a GAO protest.  It argued, in part, that its exclusion from the competition was a negative responsibility determination, which should have been referred to the SBA.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-doubles-down-on-fedbidcoc-ruling/

U.S. files suit against firm for allegedly submitting false claims under HUBZone program

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The United States has filed a complaint against Orlando, Florida, based Air Ideal Inc. and its owner, Kim Amkraut, for allegedly making false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company.

Under the federal HUBZone program, companies that maintain their principal office in a designated HUBZone and meet certain other requirements can apply to the SBA for certification as a HUBZone small business company.  HUBZone companies can then use this certification when bidding on government contracts.  In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

Justice Dept. sealThe complaint alleges that Air Ideal and Kim Amkraut originally applied to the HUBZone program in 2010 by claiming that Air Ideal’s principal office was located in a designated HUBZone.  The complaint further alleges that, in fact, this location was a “virtual office” where no Air Ideal employees worked and Air Ideal was actually located in a non-HUBZone location.  Allegedly, the defendants not only misrepresented the location of Air Ideal’s principal office to the SBA, but also submitted to the SBA a fabricated lease agreement for its purported HUBZone office.

The complaint alleges that Air Ideal used its fraudulently-procured HUBZone certification to obtain contracts from the U.S. Coast Guard, U.S. Army, U.S. Army Corps of Engineers and the U.S. Department of Interior that were worth millions of dollars.  Each of those contracts had been set aside for qualified HUBZone companies.  The complaint asserts claims against Air Ideal and Kim Amkraut under the False Claims Act and the Financial Institutions Reform, Recovery, and Enforcement Act of 1989.

The United States filed its complaint in a lawsuit filed under the qui tam or whistleblower provisions of the False Claims Act.  Under the act, a private citizen can sue on behalf of the United States and share in any recovery.  The United States is entitled to intervene in the lawsuit, as it has done here.

The case is U.S. ex rel. Hopson v. Air Ideal, Inc. and Kim Amkraut, No. 6:13-cv-775-Orl-37GJK (M.D. Fla.).

The claims asserted against Air Ideal and Kim Amkraut are allegations only, and there has been no determination of liability.

Source: http://www.justice.gov/opa/pr/united-states-files-suit-against-air-ideal-and-its-owner-allegedly-submitting-false-claims

4 face prison for alleged fraud in claiming 8(a) and SDVOSB status for millions of dollars of federal contracts

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Four individuals pleaded not guilty last week to three counts of fraud involving federal contracts intended for 8(a) and service-disabled veteran-owned small businesses.

A federal grand jury in Greeneville, Tennessee returned an indictment on Aug. 12, 2013, against Ricky Anthony Lanier, 47, and Katrina Reshina Lanier, 40, of LaGrange, N.C.; Latoya Montrevette Speight, 37, of Snow Hill, N.C.; and Emanuel Louis Hill, 47, of Louisville, Ky., for wire fraud, conspiracy to commit wire fraud, and major fraud against the United States.

These individuals appeared in court on Sept. 9, 2014 before U.S. Magistrate Judge Dennis Inman and pleaded not guilty. All were released on bond pending trial, which has been set for Nov. 18, 2014 in U.S. District Court, in Greeneville, Tennessee.

If convicted, they all face a term of 20 years in prison as to each wire fraud charge and up to 10 years in prison for the charges of major fraud against the United States. Additionally, they face fines of up to $250,000 and up to three years of supervised release as to each count. The indictment also seeks forfeitures of approximately $15 million as to the Laniers and Speight and approximately $5 million as to Hill.

Details of this conspiracy are included in the indictment on file with the U.S. District Court, which alleges that the Laniers, Speight, and Hill conspired from November 2005 to April 2013 to defraud the United States government through a scheme to fraudulently obtain federal contracts intended to be awarded to businesses lawfully participating in the Small Business Administration’s 8(a) Business Development program and the Department of Veterans Affairs’ Service-Disabled Veteran-Owned Small Business Concern program.

Court records state Ricky Lanier was an owner of Global Construction Inc. (GCI), which participated in the SBA’s 8(a) business development program from 1998 to 2007. Katrina Lanier and Speight worked at GCI.  From 2001 to 2007 GCI received over $23 million in federal contracts.

In 2007, however, GCI graduated from the 8(a) program and was no longer eligible to receive 8(a) set-asides.

Kylee Construction, founded in 2005, originally had a mailing address of Emanuel Louis Hill’s father’s home, then a post office box opened by Ricky Lanier, and eventually changed to Hill’s home address.   Between 2010 and 2013, Kylee Construction received over $5 million in contracts under the Department of Veterans Affairs program for small businesses owned by service-disabled veterans.

Lanier also convinced a North Carolina-based company, JMR Investments, that he would handle all of their construction business.   From 2008 to 2013, JMR received over $9 million in federal contracts designated under SBA and VA programs.

This indictment is the result of an investigation by Department of Veterans Affairs Office of Inspector General, Department of Interior Office of Inspector General, Small Business Administration Office of Inspector General, and United States Secret Service, with assistance from the National Park Service and General Services Administration Office of Inspector General. Assistant U.S. Attorneys Neil Smith and David Gunn will represent the United States.

 

Interior Dept. issues implementation rules on Buy Indian Act, effective July 8th

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The Department of the Interior is finalizing regulations guiding implementation of the Buy Indian Act, which provides the Bureau of Indian Affairs (IA) with authority to set aside procurement contracts for American Indian-owned and controlled businesses and Alaska Native-owned and controlled businesses.

The new rule can be found at 78 Fed. Reg. 34266, dated June 7, 2013.

This rule supplements the Federal Acquisition Regulation (FAR) and the Department of the Interior Acquisition Regulation (DIAR), and the final rule is to be effective July 8, 2013.

The rule supplements the Federal Acquisition Regulation and Department of the Interior Acquisition Regulation, and will be located at 48 C.F.R. Sections 1401.301-80, 1452-280 and 1480. It also responds to and incorporates the nuances of Section 831 of the National Defense Authorization Act for Fiscal Year 1991 (Pub. Law 101-510, 10 U.S.C. 2301 note) that amended 25 U.S.C. 47 to allow American Indian firms to participate in the Department of Defense’s Mentor-Protégé Program and yet maintain eligibility for contracts awarded under the authority of the Buy Indian Act.

Indian economic enterprises interested in contracting with Indian Affairs should monitor the Federal Business Opportunities website — www.FedBizOpps.gov — to identify opportunities for which there is a Buy Indian set-aside under this rule.

House subpoenas four agencies for small-business noncompliance

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Four federal agencies were issued subpoenas by the House Small Business Committee on Oct. 20 for not complying with the Small Business Act’s procurement policies, according to a committee staffer.

The departments of Justice, Agriculture, Treasury and State were summoned to appear before the the Small Business subcommittee on contracting and workforce on Nov. 1 to testify why they are in noncompliance.

At issue is the “structure” of these agencies’ Small and Disadvantaged Business Utilization Offices (OSDBU) and “the fact that they are not reporting to the agency head or deputy head,” wrote Darrell Jordon, house committee spokesman, in an e-mail to Washington Technology.

OSDBUs were conceived in 1978 with the purpose of having federal agencies set aside contracts for small and disadvantaged businesses. The Small Business Act also has requirements that agencies report their procurement activities with small and disadvantaged businesses.

Justice, Agriculture, Treasury and State were warned of their missteps and given a chance to remedy the situation after a June Government Accountability Office small business contracting report found seven agencies not in compliance.

Following that report, letters to agencies were sent by subcommittee Chairman Mick Mulvaney (R-SC). As a result, the Interior Department and Social Security Administration are now in compliance, and a third, the Commerce Department, was pardoned due to an administrative issue.

In September, agencies were reminded of their noncompliance by memo and a hearing was held on Sept. 15 by the subcommittee to examine the GAO report and the economic impact of noncompliance.

As part of the subpoena procedure, the four agencies must produce a number of documents, including paperwork relating to their small business procurement programs, attainment of small business goals or challenges to decisions not to restrict competition to small business between Jan. 20, 2009, and Sept. 30, 2011.

About the Author: Alysha Sideman is an online content producer with 1105 Government Information Group.  Published by Washington Technology – Oct. 21, 2011 at http://washingtontechnology.com/articles/2011/10/21/small-biz-committee-subpoenas.aspx

Four departments resist call to comply with Small Business Act

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Conflicting interpretations of agency internal reporting requirements in the Small Business Act have prompted a stalemate between four departments and congressional overseers examining the performance of programs designed to assure that small businesses get a fair share of federal contracting.

The Government Accountability Office in a report had found that seven agencies were not complying with the law’s requirement that the Offices of Small and Disadvantaged Business Utilization in every department except Defense must report directly to the agency.

At a hearing Thursday with the House Small Business Subcommittee on Contracting and the Workforce, a GAO specialist reported that the State, Commerce, Treasury and Justice departments recently had declined requests that they comply.

Subcommittee Chairman Mick Mulvaney, R-S.C., told the hearing that a failure to comply presents a clear conflict of interest and is “completely unacceptable . . .  President Obama says that ‘small business contracting should always be a high priority in the procurement process,’ but his administration disregards the basic protections for small business contractors,” Mulvaney said. “Instead of just lip service, he should make sure his administration is following the law in regards to small business requirements.”

OSDBUs were created in 1978 to help reserve some federal contracts for for-profit small business concerns in which socially and economically disadvantaged individuals own at least a 51 percent interest and manage and control daily business operations. Concretely, they seek to make sure that the tendency of contracting officers to bundle contracts for larger contractors does not exclude the disadvantaged. Reporting directly to an agency’s leader rather than only to its contracting officers is considered essential to fair consideration of contract awards, and more than half the agencies GAO surveyed said their OSDBUs report only to the agency head.

On Sept. 9, Small Business Administrator Karen Mills sent a memo to all agency heads asking them to comply. “Open and direct communication between the OSDBU director and the secretary, deputy secretary or their equivalent is paramount to ensure that small businesses receive the maximum practicable opportunity to compete for and win federal contracts that allow them to grow their businesses and create jobs,” she wrote.

GAO’s June report said seven noncomplying agencies also were out of compliance in 2003. They include Agriculture, Commerce, Interior, Justice, State, Treasury and the Social Security Administration. In August, Mulvaney sent letters to the noncomplying agencies asking them to respond by Aug. 31 about how they “intend to rectify the reporting relationship.”

William Shear, director of financial markets and community investments at GAO, explained at the hearing that Commerce and Justice disagreed that they’re not in compliance, while State and Treasury made a legal argument that they are free to delegate the authority for how OSDBUs report.

Shear told Government Executive that Agriculture didn’t reply, Interior sent a letter saying it will comply, and SSA promised to comply but hasn’t followed up with documentation.

Claims by Commerce and Justice that they are in compliance, Shear said at the hearing, “don’t fit the fact pattern” obtained when auditors interviewed the OSDBUs about interaction with agency heads. He said GAO found evidence of tension and frustration at  OSDBUs in agencies that were not complying because contracting offices are not always fulfilling their needs. “But some tension is healthy,” Shear said. He noted that there are no sanctions for noncomplying agencies.

Ranking member Judy Chu, D-Calif., agreed with the call for compliance at the hearing, which also dealt with mentor-protégé programs and SBA’s performance on data on its procurement center representatives. “Failure to comply with this requirement not only shows a callous disregard for the law, but also shortchanges small businesses that end up suffering the consequences of OSDBU’s diminished agency standing,” she said.

A spokesman for Commerce, Kevin Griffis, told Government Executive that “the department is in compliance with the law, and both its record and the progress being made to continue to improve its performance speak for themselves. In 2010, the Small Business Administration, in its Small Business procurement score card, awarded the department a grade of ‘A’ for its procurement practices — up from the previous year’s ‘C.’

Justice spokeswoman Gina Talamona said in an email that the department “fully supports the mission of the Office of Small and Disadvantaged Business Utilization. Consistent with the Small Business Act, department regulations provide that the director report directly to the deputy attorney general. Although OSDBU is located within the department’s Justice management division for administrative purposes, the director still reports to the deputy attorney general on substantive matters.”

Mulvaney said he plans to hold another hearing on OSDBUs and invite agency heads or senior officials from noncomplying agencies, adding, “They won’t enjoy it.”

— by  Charles S. Clark – Government Executive – September 16, 2011 at http://www.govexec.com/story_page.cfm?articleid=48818&dcn=e_gvet

Upcoming vendor conferences — valuable, if you do your homework

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In the next few weeks and months there are many government-sponsored conferences being held to attract small businesses to, and inform small businesses of, government agencies’ upcoming contracting opportunities.

Toward the end of this article, you’ll see a list of many government-related vendor conferences coming up, along with details on how to register.

But before jumping right into that list, the Georgia Tech Procurement Assistance Center (GTPAC) suggests you take a few preparatory steps.  After all, it’s important that you make a sound decision about whether it’s worth the time, effort, and expense to attend a particular vendor conference.

First of all, small businesses should make no mistake about it: government agencies may need you more than you need them.  Federal agencies are under the gun to ensure that small businesses — including 8(a) firms, companies in HUBZones, service disabled veteran owned small businesses, and others such as women-owned businesses at the subcontract level — get their share of the “contract spend.”

(Keep in mind that this is especially true as the federal government nears the end of its fiscal year — Sept. 30th of each year.  Contracts must be obligated by that date, or agencies lose those budgeted funds.  In addition to spending by that date, often there’s also a rush to meet small business goals.)

All this is why agencies host conferences — to demonstrate that they are reaching out to the small business community.

Does that mean that you should attend as many governmental vendor conferences as you can, and that by attending, contracts will begin to fall in your lap?   Hardly.

From GTPAC’s perspective, government-sponsored vendor conferences run the gamut in value.  Some are well-organized, featuring details on specific, upcoming opportunities as well as access to the decision-makers.  Other conferences, however, can be disappointing, consisting of little more than “a dog and pony show.”

So how do you select a good conference to attend?   How do you reduce the risk that you’ll be attending a conference that has little value to you?

There are several things you should do before deciding to go to a government-sponsored vendor event.  Here is a checklist:

1. Research the conference sponsoring agency’ s forecasted contract opportunities.  Look for the sponsoring agency’s annual procurement forecast on that agency’s website.  Use www.google.com/unclesam and type in the name of the federal agency and “procurement forecast.”  (If that search fails to produce the results you need, check https://www.acquisition.gov/comp/procurement_forecasts/index.html.) One thing for sure, before you attend an event, you want to make sure the sponsoring agency buys what you sell.

2. Find out what contract opportunities will be the subject of the conference.  Even if an agency buys what you sell, you’ll want to make sure that will be the focus of the conference.  Look in the conference announcement — see if the agency identifies specific goods and services that will be the focus of the conference.  Are the NAICS codes for future contracts identified, and do they match-up with yours?

3. Determine whether you’ll get access to decision-makers.  Look for opportunities to meet one-on-one with the people who make the buying decisions.  Good vendor conferences will provide you with the opportunity to meet, on an appointment basis during the event, with agency contracting officials.  See if you can make appointments as a part of the registration process or whether such opportunities exist on-site at the event.  Think outside the box: If you arrive early — or stay late — will you be able to spend time with the people who award contracts?

4. Once you select a conference, prepare yourself.  Remember, only one-third of the “action” occurs at the event itself.  You should spend the first third of your time preparing to attend.  And another third should be spent in follow-up, after the event.  If you are not prepared to make this much of an investment of your time, maybe you shouldn’t attend.  To help you prepare, attend, and follow-up, we recommend you read our detailed article at:  http://gtpac.org/2012/12/14-tips-for-attending-a-government-expo-or-trade-show.  Your GTPAC Counselor will be glad to elaborate on this topic and provide you with additional advice.  You can find our contact information right here.

Now, what you have been waiting for:  The information about upcoming government vendor shows.  Here they are:

2011 Conferences

2010 Conferences (Note: Conference materials are posted on many past conferences.)

© 2011 Georgia Tech Procurement Assistance Center – All Rights Reserved.

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