Secret Service taking steps to strengthen certain acquisition policies, oversight, says DHS IG

The Secret Service has adequate oversight and management of its acquisitions, but it needs specific internal policies for acquisitions valued at less than $300 million – an issue that the agency is addressing, the Homeland Security Department’s inspector general said recently.

The IG’s revised audit dated Feb. 10 said the Secret Service should have its own policies and procedures and a designated “component acquisition executive,” or CAE, to strengthen its program. The agency should also integrate best practices into its daily operations, the report added.

“Taken together, these actions will decrease the risk of waste, fraud, and abuse and improve the Secret Service’s ability to acquire goods and services in a timely manner and at a reasonable cost,” the audit said.

Keep reading this article at: http://www.fiercehomelandsecurity.com/story/secret-service-taking-steps-strengthen-certain-acquisition-policies-oversig/2015-02-17

‘Fat Leonard’ contracting scandal jams up dozens of US Navy flag moves

It was a festive day at the U.S. Naval Academy last July 23 as the US Navy’s top leadership gathered in Annapolis, Maryland, for a change of command and retirement ceremony. Vice Adm. Mike Miller was ending a four-year tour as academy superintendent and retiring with honors after a 40-year career.

Except that when the hoopla died down, Miller wasn’t allowed to leave the service just yet. Even though his official online biography reads “retired,” he’s still being carried on the Navy’s active-duty rolls — at a reduced two-star level. And although he has no specific job — or billet, in Navy-speak — he counts against the service’s allocated total of 219 admirals.

Defense officials said Miller is one of an estimated three dozen flag officers under federal investigation for potential wrongdoing in the Glenn Defense Marine Asia (GDMA) case, also known as the “Fat Leonard” affair, after the nickname of the company’s leader, Leonard Glenn Francis.

Keep reading this article at: http://www.defensenews.com/story/defense/naval/navy/2015/02/08/navy-gdma-glenn-defense-marine-asia-fat-leonard-scandal-investigation-justice-admirals-flags/22978631

Former supervisory contracting officer arrested in Navy bribery scandal

A former senior federal contracting officer was arrested last week for conspiracy to commit bribery in connection with his alleged role in a scheme to steer contracts and benefits to Glenn Defense Marine Asia (GDMA), a defense contracting firm headquartered in Singapore.

Assistant Attorney General Leslie R. Caldwell of the Justice Department’s Criminal Division, U.S. Attorney Laura E. Duffy of the Southern District of California, Director Andrew L. Traver of the Naval Criminal Investigative Service (NCIS) and Deputy Inspector General of Investigations James B. Burch of the Department of Defense (DCIS) made the announcement.

“Today’s arrest in this ongoing investigation demonstrates our continued resolve to root out all of the corrupt officials involved in this bribery scheme,” said Assistant Attorney General Leslia R. Caldwell.  “As alleged, Paul Simpkins misused his position as a contracting officer at the U.S. Navy to obtain bribes of cash, air travel, hotel rooms, and prostitutes, and his actions tarnish the reputation earned by the vast majority of U.S. Navy officers and enlisted and civilian personnel.”

“With the arrest of Paul Simpkins, who was recently among the Defense Department’s high ranking civilians we have uncovered yet another tentacle of this pervasive bribery scheme,” said U.S. Attorney Laura E. Duffy.  “The more we learn about the extent of the greed and corruption, the more determined we are to eviscerate it.”

“As we’ve mentioned previously, the GDMA investigation is far from over,” said Naval Criminal Investigative Service (NCIS) Director Andrew I. Traver.  “NCIS will follow the evidence wherever it leads, to bring to justice those who were involved in perpetrating this massive fraud on the Department of the Navy and the American taxpayer.  Active leads remain and NCIS will stay on the case until our work is done.”

“As the filing of today’s Criminal Complaint and subsequent arrest of Paul Simpkins shows, the Defense Criminal Investigative Service and its law enforcement partners will continue to identify and investigate those individuals who seek to defraud the U.S. taxpayer,” said DoD’s Deputy Inspector General of Investigations James B. Burch.  “Any individual, regardless of position, who allowed Glenn Defense Marine Asia Ltd. to prosper at the expense of the American taxpayer, will be brought to justice.”

Paul Simpkins, 60, of Haymarket, Virginia, is the latest individual to be arrested in connection with a corruption probe involving the U.S. Navy, GDMA, and its owner, Leonard Glenn Francis.  To date, seven individuals, including Francis, and GDMA have entered guilty pleas as part of the investigation.

According to a criminal complaint unsealed today, Simpkins held several manager-level contracting positions throughout the federal government, including Supervisory Contract Special at the U.S. Navy Regional Contracting Center in Singapore from April 2005 through June 2007, and manager in the Department of Defense’s Office of Small Business Programs from December 2007 to August 2012.  The complaint alleges that between May 2006 and September 2012, Simpkins accepted several hundred thousand dollars in cash and wire transfers, travel and entertainment expenses, hotel rooms and the services of prostitutes.  In return, Simpkins allegedly helped steer lucrative U.S. Navy contracts to Francis and GDMA, advocated for and advanced the interests of GDMA in contract disputes, and assisted in preventing GDMA’s competitors from receiving U.S. Navy business.

The complaint specifically alleges that, beginning in early 2006, Simpkins and Francis held a series of meetings at a hotel in Singapore in which Francis agreed to provide Simpkins with things of value in return for help in steering lucrative ship husbanding contracts to GDMA.  Specifically, the complaint alleges that Francis paid Simpkins by hand-delivering over $150,000 in cash and by making several wire transfers to a bank account held in the name of Simpkins’s wife at the time.  To conceal the true nature of the wire transfers, Simpkins allegedly used an email account belonging to his mistress to advise Francis of the routing and account information of the bank account belonging to his wife.

In return for the things of value, Simpkins allegedly used his influence within the U.S. Navy to benefit GDMA, including by helping GDMA to secure lucrative ship husbanding contracts to service U.S. Navy vessels in Thailand and the Philippines.  In addition, Simpkins allegedly interceded on GDMA’s behalf in contract disputes with the U.S. Navy.  The complaint specifically alleges that in 2006, Simpkins’s subordinate recommended that GDMA’s husbanding contract in Thailand not be extended due to “many exceedingly high cost” items.  Simpkins allegedly overruled his subordinate and extended GDMA’s contract.

In another example, Simpkins allegedly instructed U.S. Navy officials in Hong Kong to discontinue the use of meters that monitored the volume of liquid waste that GDMA removed from U.S. Navy ships under its husbanding contracts.  The use of these meters would have ensured proper accounting of the actual amount of waste removed to ensure that no overbilling occurred.  Simpkins also allegedly instructed a U.S. Navy official not to review invoices that GDMA submitted in connection to a recent port call in Hong Kong after Francis complained that U.S. Navy personnel were asking questions.

The charges contained in a complaint are merely accusations, and a defendant is presumed innocent unless and until proven guilty.

Anyone with information relating to fraud, corruption or waste in government contracting should contact the NCIS anonymous tip line at www.ncis.navy.mil or the DOD Hotline at www.dodig.mil/hotline, or call (800) 424-9098.

Source: http://www.justice.gov/opa/pr/former-supervisory-contracting-officer-arrested-navy-bribery-scandal

Air Force suspends, begins debarment process of reverse-auctioneer FedBid

The Air Force has suspended FedBid from federal procurement activity, both new contracts and follow-ons, as of Jan. 26, 2015 and proposed the reverse auction company for debarment.

FedBid’s listing in the System for Award Management (SAM) says the Air Force suspended and is proposing debarment with proceedings pending.

The Air Force wrote in the listing on SAM that it deemed FedBid ineligible for new contracts or follow-on deals “based upon adequate evidence of conduct indicating a lack of business honesty or integrity, or a lack of business integrity, or regulation, statute, executive order or other legal authority, pending completion of an investigation and/or legal proceedings.”

“As promised in our previous reporting on VA’s contracting and relationship with FedBid, the OIG referred FedBid to the Interagency Suspension and Debarment Committee for an independent decision whether the company should be debarred. Through the Committee’s processes the Department of the Air Force agreed to be the lead agency,” said an VA OIG spokesperson in an email to Federal News Radio.

Keep reading this article at: http://www.federalnewsradio.com/395/3789803/Air-Force-suspends-begins-debarment-process-of-FedBid-

Former security contractor CEO agrees to pay $4.5 million to settle civil claims

Keith Hedman, 55, of Arlington, Virginia, the former chief executive officer of a Virginia-based security contracting firm, Protection Strategies, Inc. has agreed to pay $4.5 million to settle civil claims relating to his involvement in a fraudulent scheme to create a front company to obtain contracts through the Small Business Administration’s Section 8(a) program.  The Section 8(a) program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the settlement agreement was signed by both parties. “The civil settlement illustrates the importance of not stopping at a criminal resolution when a defendant has pled guilty to fraud against the government,” said U.S. Attorney Boente.

The settlement resolves civil claims against Hedman relating to the criminal plea entered by him in U.S. v. Hedman,1:13cr74. According to court records, in or about 2001 Hedman formed PSI, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left PSI in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

Keep reading this article at: http://www.alexandrianews.org/former-security-contractor-ceo-agrees-to-pay-4-5-million-to-settle-civil-claims/

 

Corruption, bribery rampant in government contracting, key witness in case says

Even before he competed for his first government job, the key witness in the largest bribery case in federal contracting history said an associate warned him that he’d have to “pay to play,” according to a recent jailhouse letter.

Alex Cho said he began work as a contractor because he thought doing business with the U.S. government would be an honest way to make a living — a notion he quickly abandoned.

“In planning to get into this field, I actually thought I would be getting away from dishonesty,” Cho told U.S. District Judge Emmet G. Sullivan in a lengthy letter from the D.C. Jail — his first public remarks on the historic $30 million corruption scam that has resulted in 20 guilty pleas.

The ringleader, Army Corps program manager Kerry Khan, extracted millions of dollars in kickbacks from corrupt contractors for years. But Cho said Khan also made other “absurd demands.”

Keep reading this article at: http://www.washingtontimes.com/news/2014/dec/14/corruption-rampant-government-contracting-key-witn/

IG says VA official inappropriately steered contracts before moving to Treasury

A former top procurement official at the Department of Veterans Affairs — who now holds a similar position at the Treasury Department — steered contracts to a company with which she had a personal relationship, according to a watchdog report.

In concert with a VA colleague, Iris Cooper “preselected” the company, Tridec Technologies, then divided the work up into separate, smaller contracts that stayed below a threshold that allowed them to be awarded without competition, according to the agency’s Inspector General. In all, the Ohio-based company won more than $15 million in work since 2009 to help build an online acquisitions site

VA sealThe IG’s report is the second in recent months to accuse a top-ranking VA acquisitions official of improperly steering contracts. In September, the IG said that another VA contracting officer sought to improperly benefit Vienna-based FedBid. She resigned after the report became public.

Keep reading this article at: http://www.washingtonpost.com/blogs/federal-eye/wp/2014/12/18/report-va-official-inappropriately-steered-contracts-before-moving-to-treasury/

War zone food contractor pleads guilty to overcharging

A major supplier of food and bottled water to U.S. military bases in Iraq and Afghanistan on Monday of last week pleaded guilty to overcharging the Defense Logistics Agency by $48 million.

Supreme Food Service, whose parent company is based in the Netherlands, agreed to pay $434 million to settle criminal and civil charges for its handling of an $8.8 million contract that was terminated in 2013, according to news reports.

The case decided in U.S. District Court in Eastern Pennsylvania was brought in part by a whistleblower employed by the company, who will receive $16.2 million, plus $1.5 million for attorney’s fees and expenses, according to Bloomberg.

Keep reading this article at: http://www.govexec.com/contracting/2014/12/war-zone-food-contractor-pleads-guilty-overcharging/100824/

Former Army contracting official sentenced to 4 years in prison in bribery and kickback scheme

In Seon Lim, a former contracting official for the U.S. Department of the Army, has been sentenced to four years in prison for his role in a scheme in which he accepted over $490,000 worth of benefits, including cash payments and vacations, from favored contractors. In return, he helped these businesses obtain millions of dollars in federal contracts.

Lim, 48, of Fairfax Station, Va., also known as InSeon Lim, pled guilty in July 2014 in the U.S. District Court for the Eastern District of Virginia to three offenses: conspiracy to commit bribery and honest services wire fraud; bribery; and attempting to interfere with and impede tax laws.

Upon completion of his prison term, Lim will be placed on three years of supervised release. He also must pay restitution, including $250,000 to the Department of Defense and nearly $125,000 to the IRS. In addition, he must pay a forfeiture money judgment of $490,262.

Lim is among 18 individuals and one corporation, Nova Datacom, LLC, to plead guilty to federal charges in an investigation that uncovered the largest domestic bribery and bid-rigging scheme in the history of federal contracting cases. Overall, participants in the scheme stole over $30 million in government money through inflated and fictitious invoices.

According to a statement of offense, signed by Lim as well as the government, Lim was a public official until April 2012. The charges involve his activities as an assistant project manager and product director with the Program Executive Office Enterprise Information Systems, a part of the Army that provides infrastructure and informational management systems.

Until June 2010, Lim resided and worked in Seoul, South Korea. While in South Korea, his primary duties were to oversee and implement communications systems upgrades for the U.S. forces there, which included approximately 10 communications centers and various other special projects at military sites throughout the country. Among other things, Lim coordinated work on a major contract, which, in turn, had numerous sub-contracts.

From June 2010 until his resignation in April 2012, Lim worked as a product director at Fort Belvoir, Va.

In the statement of offense, Lim admits that he secretly used his official position to enrich himself by soliciting and accepting gifts, payments and other things of value from government contractors—totaling more than $490,000—in return for favorable official action. Among other things, the statement of offense notes, Lim received payments personally and to accounts that he controlled; payments for travel, vacation, vehicles, cellphones and cellular service for himself and family members; ownership interests in two companies, and other benefits.

In exchange, Lim now admits, he provided favorable official action on subcontracts obtained and retained by the favored government contractors as requested and as opportunities arose. He also disclosed confidential bid information to the favored government contractors.

“This Army official sold the public trust for a half-million dollars in bribes,” said U.S. Attorney Machen. “Lim is now headed to prison along with many other corrupt officials and government contractors brought down in this sweeping investigation. His fate is a warning shot for other government officials tempted to sell out the American people to line their own pockets that they should think twice. The prison sentences handed out in this case make clear that government officials and business people who corrupt the contracting process put their own freedom at risk.”

“In his role as a federal contracting officer, In Seon Lim betrayed the trust that was placed in him by fellow citizens by taking bribes in exchange for providing favorable action on government contracts,” said Assistant Director in Charge McCabe. “The FBI, with our partners, will continue to investigate and expose fraudulent kickback schemes that tarnish the good and ethical work that procurement officers carry out on behalf of the U.S. government each and every day.”

“The kickback scheme in which In Seon Lim participated disrespected the hard work and dedication of thousands of government employees who are committed to providing honest services in the federal contracting process,” said Special Agent in Charge Kelly. “IRS-Criminal Investigation stands committed to weeding out individuals, who abuse the privilege of their positions as a public official, for their personal gain.”

The court documents provide details about numerous contracts and payments. For example:

  • Nova Datacom: According to the statement of offense, two former employees of the Northern Virginia company—Alex N. Cho, also known as Young N. Cho, and Nick Park—paid Lim $40,000 in cash in 2007. In addition, Park paid for Lim’s travel, lodging, meals and entertainment during a trip to the Philippines in 2007, and Cho paid for Lim’s lodging, $10,000 cash, and a $1,000 casino chip during a trip later that year to Las Vegas. Lim, meanwhile, agreed to use his official position to recommend the company for a contract valued at nearly $330,000.
  • Avenciatech:According to the statement of offense, former officials of Avenciatech, Inc., a government contractor based in Annandale, Va., provided Lim with cash payments; payments for hotel stays for Lim and family members, including a trip to the Atlantis resort in the Bahamas; payments to finance the purchase of a 2010 Lexus automobile, and payments for other things of value. One of the officials, Oh Sung Kwon, also known as Thomas Kwon, also assisted Lim in obtaining financing for the purchase of a home in Fairfax Station, Va., where Lim resided following his reassignment in 2010 to a position at Fort Belvoir. Lim, meanwhile, assisted the company in obtaining more than $3 million in contracts.
  • UEI: Nick Park left Nova Datacom in 2007 and co-founded another government contractor, Unisource Enterprise Inc. (UEI), based in Annandale, Va. According to the statement of offense, in exchange for favorable treatment, Lim was given a secret ownership in UEI. Among other things, Lim provided Park with sensitive procurement information. He also assisted the company in obtaining a government sub-contract worth over $1.1 million.

Cho, Park, and Kwon are among those who earlier pled guilty to charges in the case.

In addition to pleading guilty to the conspiracy and bribery charges, Lim admitted that he failed to report the bribes he received on tax returns for the years 2007 through 2011. He also failed to keep records that would allow him to file accurate records for 2012 and 2013.  Lim was sentenced on Oct. 24, 2014.

VA contracting official resigns amid agency’s attempt to fire her

A top Department of Veterans Affairs contracting officer who allegedly steered work to a Virginia firm resigned Tuesday, eight days after the agency announced that it had begun the process of firing her.

Susan Taylor, the Veteran Health Administration’s No. 2 contracting official, said in an e-mail to employees that she decided to “resign and retire,” effective Oct. 14. She has worked with the federal government for 29 years, spending four of them with the VA.

“I will definitely miss the terrific staff I have had at VHA, both at headquarters and in the field nationwide, but I know that you will continue to admirably serve our veterans through your dedicated service,” Taylor wrote. She also indicated that the VA is trying to recruit a replacement for her.

The VA inspector general’s office said in a report last month that Taylor helped steer a contract to Vienna-based FedBid and worked with the government-services company to overturn an agency moratorium on work by the firm, in addition to interfering with an investigation of the matters.

keep reading this article at: http://www.washingtonpost.com/blogs/federal-eye/wp/2014/10/14/va-contracting-official-susan-taylor-resigns-amid-agencys-attempt-to-fire-her/