Florida company pays $7.4 million to settle allegations of double-billing on contract in Iraq

Centerra Services International, Inc. has agreed to pay $7.4 million to resolve allegations that it violated the False Claims Act by double billing and inflating labor costs in connection with a contract for firefighting and fire protection services in Iraq, according to the Department of Justice. 

Justice Dept. sealCenterra, formerly known as Wackenhut Services LLC,  is a security services company headquartered in Palm Beach Gardens, Florida.

“Our military depends on the private sector – both prime contractors and subcontractors – to provide critical services to protect the health and safety of our men and women in uniform,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Those subcontractors who knowingly inflate the costs of these services, which are passed onto the government and the taxpayer, will face appropriate consequences.  [This] settlement demonstrates our continuing vigilance to ensure that our servicemen and women obtain the services they need at the price we bargained for.”

Wackenhut provided U.S. military bases with firefighting and fire protection services under a subcontract with Kellogg Brown & Root Inc. (KBR), the prime contractor for the Army’s contract for logistical support in the military theater, known as LOGCAP III.  LOGCAP III is the third generation of contracts under the Army’s Logistical Civil Augmentation Program.

The government alleged that from 2008 to 2010, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs.  The government further alleged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.  Wackenhut billed KBR, which then passed on the costs to the government under LOGCAP III.

“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS) Southwest Field Office.  “The DCIS is committed to working with its partner agencies, such as the U.S. Department of Justice, Defense Contract Audit Agency and the U.S. Army Criminal Investigation Command to ensure the integrity of the Defense Department’s procurement process.  This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense contracting remains a top priority.”

This settlement resolves a lawsuit filed by whistleblower Gary W. Reno under the qui tam or whistleblower provisions of the False Claims Act.  The act permits private individuals to sue on behalf of the government those who falsely claim federal funds, or cause others to do so, and to receive a share of any funds recovered through the lawsuit.  Reno will receive $1.332 million as his share of the recovery.

This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Texas, the Department of Defense Inspector General’s Office, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is captioned Reno v. Kellogg Brown & Root, Inc. and Wackenhut Services, LLC, et al., Case No. 1:10-CV-504 (E.D. Tex.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: http://www.justice.gov/opa/pr/florida-based-centerra-services-international-inc-agrees-pay-74-million-settle-false-claims

GSA takes the easy way out to solve contracting challenge

The General Services Administration’s choice to create a blanket purchase agreement for Salesforce cloud integration and support services on the surface seems logical.

GSA Salesforce DecisionIt’s a widely used platform — according to a simple search on USASpending.gov website there have been 227 contracts worth more than $61 million since fiscal 2011— and one that needs more structure and control across government.

“The marketplace for Salesforce implementation and integration services was fragmented and had some disparity in there,” said David Shive, GSA’s chief information officer during a press call on Jan. 20. “When we looked, we saw there were no established quality standards for Salesforce development. We saw there were inexperienced vendors that were winning with new Salesforce customers, but sometimes had some dubious results coming out from those inexperienced vendors. We saw there was inconsistent delivery of code and configuration from agency to agency. There was failed implementations that was negatively impacting adoption of the tools and the processes surrounding those tools. And we saw that some vendors were rebuilding the same apps for the same agency and were developing closed systems in an otherwise open environment.”

Keep reading this article at: http://federalnewsradio.com/reporters-notebook-jason-miller/2016/01/gsa-takes-easy-way-solve-contracting-challenge/

City trains employees to think like entrepreneurs

What’s happening with city employees in Albuquerque, New Mexico may help change the way we think about entrepreneurship and the way business owners, founders and managers think about employees.

Entrepreneurial ThinkingA little more than a year ago, Albuquerque Mayor Richard J. Berry launched a program to teach 100 city employees how to think like entrepreneurs and learn the entrepreneurial mindset. That mindset is the set of skills and attitudes that entrepreneurs and innovators use to identify opportunities and overcome challenges.

“We enrolled 100 City employees because we need the entrepreneurial mindset now more than ever. It is about creating an environment to succeed that is based in efficiency, critical thinking and collaboration. We think the entrepreneurial mindset is a big part of the equation that leads us towards innovation and success,” Berry said.

The mayor and partners at Central New Mexico Community College have placed bets that exposing city employees to the mindset can transform the way they work, making the city more efficient and boosting the satisfaction of their residents and taxpayers.

Keep reading this article at: http://www.entrepreneur.com/article/254901

DOJ finds federal employee’s business ownership fraudulent, fines DBE firm $84,000

A Massachusetts-based transportation consulting  company has been charged by the U.S. Department of Justice  with making a false statement in connection with its certification for favored contracting status.

Justice Dept. sealTransit Safety Management, Inc. (TSM) was charged with one count of making a false statement to a state agency in order to maintain its status as a Disadvantaged Business Enterprise (DBE).

In order to qualify as a DBE, a company’s management must be controlled by a socially or economically disadvantaged individual such as a woman or minority.  The purpose of the program is to give an economic advantage to minorities and women who run their own companies.  However, the manager of the DBE cannot also engage in employment that would prevent her from devoting sufficient attention to the affairs of the DBE.  In this case investigators discovered that TSM’s purported owner was a full-time employee of a federal agency and the business was really operated by her husband making it ineligible for certification as a DBE.

US DOTTSM provided consulting services to the railroad industry, focusing on safety and operations management.  Shortly after it was founded in 1999, TSM’s owner certified the company as a DBE.   As such, TSM was able to take advantage of federal regulations aimed at promoting the participation of minority and disadvantaged businesses in federally-funded public construction contracts.  Under the DBE regulations, a contractor on federally-assisted transportation projects must either subcontract a percentage of its work to a DBE or show that it made a good faith effort to subcontract work to a DBE but was unable to do so.  This requirement makes the DBE status a valuable and potentially lucrative designation.

In order to maintain its DBE certification, TSM had to make yearly affirmations that it was still eligible and that nothing had changed that would affect its eligibility for the favored DBE status.  Despite this, TSM lied about whether it met the criteria for DBE status.  According to court documents, TSM’s owner was hired as a full-time employee with a federal agency in 2005.  As a full-time federal employee, TSM’s purported manager could not control TSM under the regulations.  Nevertheless, TSM failed to disclose this change and continued to make its yearly affirmations to maintain is DBE status.

As part of its plea agreement, TSM has agreed to pay a fine of $84,000 and dissolve its operations.

United States Attorney Carmen M. Ortiz; Todd Damiani, Special Agent in Charge of the U.S. Department of Transportation, Office of Inspector General, Office of Investigations; and Harold H. Shaw, Special Agent in Charge of the Federal Bureau of Investigation, Boston Field Division, made the announcement of the plea agreement.  The case is being prosecuted by Assistant U.S. Attorney Eugenia M. Carris of Ortiz’s Public Corruption Unit.

The details contained in the Information are allegations.  The defendant is presumed innocent unless and until proven guilty beyond a reasonable doubt in a court of law.

Source: http://www.justice.gov/usao-ma/pr/massachusetts-company-charged-connection-disadvantaged-business-enterprise-fraud

Federal government proposing to dump use of DUNS numbers

In 2015, the federal government spent nearly half of a trillion dollars on contracts with private companies—$436,668,103,830, to be exact.

DUNS numberMembers of the public are free to drill down into this data and track funding going to specific businesses, thanks to a series of policies designed to increase government transparency and accountability by treating information about government spending as open data—machine readable, timely and freely available online.

However, federal contracting policy requires the use of a specific proprietary data standard to keep track of entities receiving federal funds.

Known as the Data Universal Numbering System, or DUNS, the current standard was developed by business information reporting company Dun & Bradstreet. And therein lies a problem: Not only is the use of a proprietary standard antithetical to the principle of an open and transparent government, as it limits the usability and accessibility of the data, but the government has already recognized that requiring the use of DUNS grants Dun & Bradstreet a monopoly on data that uses DUNS numbers, reducing competition and increasing costs.

Fortunately, the General Services Administration, the Defense Department and NASA have recently proposed to amend federal contracting policy to eliminate the requirement to use DUNS, which would make data on government spending more transparent and usable by the government and the public alike.

Keep reading this article at: http://www.nextgov.com/technology-news/tech-insider/2016/01/us-government-making-it-possible-dump-duns/125293/