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/

IG: GSA reduces credit card spending, needs more reform

Although more controls are needed, legislation to assist General Services Administration efforts to prevent waste, fraud and abuse at charge card programs has largely been helpful, an internal investigation found.

In an audit dated Sept. 29, the GSA’s inspector general said that GSA’s purchase card spending between fiscal years 2011 and 2013 fell from more than $69.3 million to about $33.6 million, and travel card spending declined from $17.1 million to about $4.2 million.

“We determined that the risks of illegal, improper, or erroneous purchases and payments made through GSA’s purchase card and travel card programs are medium and low, respectively,” the report states. “As such, we do not plan to conduct any audits of the purchase card or travel card programs in FY 2015.”

Keep reading this article at: http://www.fiercegovernment.com/story/ig-gsa-reduces-credit-card-spending-needs-more-reform/2014-10-01

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Former GSA official Jeff Neely indicted for fraudulent claims

A former high-ranking official General Services Administration official has been indicted for making fraudulent reimbursement claims.

Jeff Neely, the former region nine administrator at GSA, organized a lavish 2010 Las Vegas conference that cost almost $823,000 and prompted an investigation that forced the resignation of top officials at the agency and the firing of several others. He told conference organizers he wanted the conference to be “over the top.”

Neely was indicted by a federal grand jury for making fraudulent reimbursement claims for personal travel and expenses on trips to Las Vegas, California, Guam and Saipan. Neely told employees those expenses were for official business.

Keep reading this article at: http://www.federaltimes.com/article/20140926/MGMT/309260014/Former-GSA-official-indicted-fraudulent-claims

Disgraced Congressman Randy ‘Duke’ Cunningham is a free man again

A federal judge says it is time to forgive Randy “Duke” Cunningham, the most corrupt member of Congress ever if measured by the amount of bribes he admitted accepting.

U.S. District Judge Larry Alan Burns has granted Cunningham’s request to have his post-prison supervision ended early, writing a final legal chapter on the sordid tale of the flamboyant ace fighter pilot who went to Congress as a hero in 1991 and left in 2005 as a disgraced felon.

The California Republican spent more than seven years in prison after pleading guilty in November 2005 to charges of tax evasion and conspiracy to commit bribery, mail fraud, and wire fraud. Cunningham, who was 64 when he was sentenced in March 2006, had used his positions on the House Appropriations and Intelligence committees to steer lucrative contracts to those who would help him finance an extravagant lifestyle featuring 19th-century French antiques, yachts, Persian rugs, hunting trips, a Rolls Royce, and a $2.55 million home in an exclusive community in San Diego County.

It all unraveled in 2005 when The San Diego Union-Tribune wrote about the corruption, triggering a federal probe that found, among many other things, that Cunningham had drawn up a “bribe menu” on congressional notepaper, outlining what bribes he would need to deliver a contract or earmark.

Keep reading this article at: http://www.govexec.com/oversight/2014/07/disgraced-congressman-randy-duke-cunningham-free-man-again/88513/