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.

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Audit: HHS failure to screen Obamacare contract recipients cost taxpayers $400M

Not even good enough for government work.

An internal investigation into how the federal government awarded contracts for developing and building the Affordable Care Act’s most important public element — the online exchanges that were to be used by millions of Americans to purchase health insurance — has found the process was fraught with obvious and expensive errors.

The Department of Health and Human Services (HHS) failed to conduct background checks on prior work by companies awarded many of the Obamacare contracts and failed to require those same companies to be accountable for cost overruns, leaving taxpayers on the hook instead.

The report published Jan. 22, 2015 by the Office of the Inspector General for HHS concludes those mistakes soaked taxpayers for more than $400 million in unexpected costs — essentially doubling the expected cost of building the exchanges in the first place.

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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.

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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.

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Patent & Trademark Office lacks oversight of time-and-materials contracts, says IG

The Patent and Trademark Office didn’t follow best practices when monitoring its time-and-materials contracts for the amount of work done by a contractor, says a Dec. 3 Commerce Department inspector general report.

The IG reviewed 103 contracts worth $35.4 million and found that $24.6 million in contracts lacked the proper oversight to determine whether payments made to the contractors were warranted.

In a time and materials contract, the government agrees to be billed by a contractor for the work performed as well as the materials used.

Contracting officers often did not prepare service level agreements, which define the scope of the service, and the managers didn’t maintain documentation of contractor performance, the report says.

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Why did this federal lab pay 42 different prices for the same computer?

The Energy Department could save $2 million a year by better managing its information technology hardware, according to the agency’s inspector general.

One of the problems uncovered by the watchdog is a wide variation in the prices the department pays for the same technology across and even within agencies.

The Lawrence Livermore National Laboratory, for instance, paid 42 different prices — between about $900 and over $2,000 — for the same desktop model in 2012, the IG found. The machines did, however, have varying configurations.

Since previous audits, the department has to some extent tried to standardize equipment buys, but IT purchasing remains problematic.

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Pentagon’s buying managers resist IG’s call for central oversight office

The Defense Department’s acquisition operation would perform better with a central oversight office to improve organizational feedback on supply chain performance trends, the Pentagon inspector general said in a report dated Nov. 3, 2014.

pentagon-sealThe Office of the Defense Undersecretary for Acquisition, Technology and Logistics “has not established an overarching quality management policy to ensure the consistent application of quality management system requirements across DoD components,” the watchdog wrote. Creation of a central quality management oversight office would help reduce delays and cost overruns on major weapons systems by building in management steps “to evaluate and revise policies, procedures and guidance,” it said.

Citing past investigations and Government Accountability Office reports, the inspector general recited a litany of recent acquisition snafus: assembly of the Expeditionary Fighting Vehicle brought a four-year delay at a cost overrun of $750 million; the Advanced Threat Infrared Counter Measure/Common Missile Warning System came with a five-year delay and a $117 million cost overrun; manufacturing of the F22A Raptor Advanced Tactical Fighter was over budget by $400 million; and building of the Amphibious Transport Dock for the USS San Antonio underwent a three-year delay and a cost overrun of $846 million.

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Cloud service contracts lack needed clauses, security standards not met

A review of cloud computing services in the Commerce Department found missing clauses in contractors’ agreements to permit reviews of their facilities and operations, as well as lack of compliance with federal security standards.

In examining a sample of cloud service contracts from three bureaus, the department’s inspector general found that four did not contain a specific Commerce Department clause that would allow its investigators access to the provider’s facilities, installations, operations, documentation, databases and personnel that would be used to perform such services. As a result, the IG would not be able to conduct inspections, investigations, audits and other reviews.

Additionally, one contract did not contain a Federal Acquisition Regulation (FAR) clause that would permit the agency access to a service provider’s installations, documentation, records and databases, which is needed to make sure that government data remains secure and confidential, according to an IG memo dated Oct. 14, 2014.

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Contract management continues to be a challenge at Energy

Contract management at the Energy Department continues to be a significant challenge, says an Oct. 7, 2014 DOE inspector general report.

The DOE is the most contractor-dependent civilian agency in the federal government. It awards contracts, grants and other financial assistance to industrial companies, small businesses, academic institutions and nonprofit organizations.

About 90 percent of the DOE’s budget is spent through those contracting vehicles, the report says.

The Government Accountability Office has included the DOE on it’s high-risk list since 1990 because of inadequate contract oversight.

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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.

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