Government Contracting News | The Contracting Education Academy

September 12, 2018 By cs

Turkish man charged with conspiracy to defraud DoD of $7 million, violating Arms Export Control Act

A Turkish man who owns a New Jersey defense contracting business has been charged in a scheme to fraudulently acquire lucrative manufacturing contracts with the U.S. Department of Defense (DoD), and for conspiring to export military technical drawings to Turkey without a license from the State Department, the Justice Department announced last week.

Ferdi Murat Gul, a/k/a “Fred Gul,” of Turkey, was indicted by a federal grand jury on Sept. 5, 2018, on one count of conspiracy to commit wire fraud, six counts of wire fraud, one count of conspiracy to violate the Arms Export Control Act, and one substantive count of violating the Act. He is believed to be currently at large in Turkey.

According to the indictment:

Gul is the principal owner, chief executive officer, and general manager of two companies located in the United States: Bright Machinery Manufacturing Group Inc. (BMM), a defense contracting company located in Paterson, New Jersey; and FMG Machinery Group (FMG), a purported manufacturing company in Paterson and Long Island City, New York. Gul also maintains an ownership interest in HFMG Insaat (HFMG), a manufacturing company in Turkey.
Over approximately five years, BMM fraudulently obtained hundreds of contracts with the DoD by falsely claiming that the military parts it contracted to produce would be manufactured in the United States. From October 2010 through June 2015, the value of the contracts fraudulently awarded to BMM was approximately $7 million.
Gul routinely submitted electronic bids for DoD contracts that contained false representations about BMM’s purported domestic manufacturing operations. He falsely submitted quotes claiming that BMM would provide military goods manufactured in the United States, when in fact the company relied almost exclusively on Gul’s Turkish-based production facilities. In acquiring contracts, Gul routinely and unlawfully exported drawings and technical data, some of which was subject to U.S. export control laws, in order to secretly manufacture military parts in Turkey. Gul and his conspirators then fraudulently supplied those foreign-made parts to unwitting DoD customers in the United States.
Gul and his conspirators concealed their illicit manufacturing activities and ongoing fraud by routinely submitting forged certifications and fabricated information by e-mail to DoD representatives in New Jersey. They falsely represented that BMM and its U.S.-based subcontractors performed necessary quality control procedures in their purported domestic manufacture of military parts.

BMM fraudulently acquired 346 contracts from the DoD to domestically manufacture military parts, including parts for torpedoes for the U.S. Navy, bomb ejector racks and armament utilized in U.S. Air Force aircraft, and firearms and mine clearance systems used by U.S. military personnel abroad. Testing by the DoD revealed that some parts had numerous design flaws and non-conformities and were unusable.

The wire fraud counts each carry a maximum penalty of 20 years in prison and a fine of $250,000. The Arms Export Control Act violations each carry a maximum penalty of 20 years in prison and a $1 million fine. The Arms Export Control Act prohibits the export of defense articles and defense services without first obtaining a license from the U.S. Department of States.

The charges and allegations in the indictment are merely accusations, and the defendant is considered innocent unless and until proven guilty.

Source: https://www.justice.gov/usao-nj/pr/owner-defense-firm-charged-conspiracy-defraud-department-defense-7-million-violate-arms

September 11, 2018 By cs

For the first time in 20 years, GSA opens bids for business numbering system

The General Services Administration opened up bids to manage its vendor verification system — which ascribes a unique identifying number to each contractor doing business with the government — with the release of a request for proposals Aug. 31.

The Data Universal Numbering Systems, or DUNS number, has been the government standard for identifying contractors, non-profits and other organizations doing business with the federal government since 1962 and became an official part of the Federal Acquisition Regulation in 1998.

“The DUNS number is not just a number—it is a system for maintaining accurate, comprehensive and timely information—and it is issued rapidly and free of charge for all entities wanting to do business with the U.S. federal government,” according to the website for Dun and Bradstreet, the vendor that has managed the system since its inception and for which the number is named.

Keep reading this article at: https://www.nextgov.com/analytics-data/2018/09/first-time-20-years-gsa-opens-bids-business-numbering-system/151032/

September 10, 2018 By cs

DoD’s micropurchase threshold just increased to $10,000

The Department of Defense has issued a class deviation raising the micro-purchase threshold to $10,000, effective immediately.

The increase implements Section 821 of the 2019 National Defense Authorization Act, which was signed into law last month.

The memo explains that there are a few exceptions to the standard $10,000 threshold.

Keep reading this article at: http://smallgovcon.com/statutes-and-regulations/dod-increases-micro-purchase-threshold-to-10000-effective-immediately/

To see a handy table of current purchasing thresholds, click here: Purchasing Thresholds – September 2018

September 7, 2018 By cs

Does innovation exist in federal procurement? OFPP is on the look out

Innovation has become one of those words that has lost its meaning, particularly in the federal market.

Think about what is considered “innovative” these days. Reverse industry days? Vendors and agencies are supposed to talk.

Other transaction authority? The Defense Department, NASA and other agencies have had access to OTAs for 25-plus years.

Cloud computing? Ever heard of managed services or alternative service provider (ASP), these were the cloud before “the cloud.”

So does that mean innovation in the federal sector is unattainable? Is it just, in the words of Mark Forman, the former administrator of e-government and IT at the Office of Management and Budget under the President George W. Bush administration, “putting lipstick on the pig?”

Keep reading this article at: https://federalnewsradio.com/reporters-notebook-jason-miller/2018/08/does-innovation-exist-in-federal-procurement-ofpp-is-on-the-look-out/

September 6, 2018 By cs

How has federal contract spending changed over time?

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data. The results are thought-provoking.

Take a look at what they discovered when they examined the USAspending.gov database:

Over the past decade, federal spending on contracts increased from fiscal year 2007 through 2010, following the surge in federal funding related to the Recovery Act. As the Recovery Act tapered off in 2011, contract spending began to decrease, which accelerated following sequestration in 2013. By 2015, contract spending had fallen 27 percent from its 2010 peak, before rebounding slightly in the following years.
Seasonal trends in contract spending occur within each year. Spending tends also rise and fall on a monthly cadence, with roughly one small peak and one small drop per month. During the last month of the federal fiscal year — September — contract spending spikes, especially one week prior to the end of the government’s fiscal year.
End-of-year spikes consistently occurred across the decade, and generally followed the broad rise and fall of spending. On average, September spikes accounted for between 6-8 percent of the annual spending in a fiscal year.
USAspending.gov data captures two types of activity related to contracts: 1) the issuance of new contracts, and 2) modifications to existing contracts. Splitting spending on contracts into these two categories, DataLab found that spending on new contracts tended to spike in September. Modifications, however, displayed less variance and did not spike as drastically at the end of each fiscal year. This suggests that new contracts — not modifications—drove the spikes at the end of each fiscal year.
USAspending data also captures what the government received from a contract (i.e., goods or services.) This categorization scheme, utilizing Product and Service Codes, contains almost 6,000 different categories, ranging from Dining Facility Maintenance to Buoys. For this analysis, DataLab collapsed these 6,000 categories into seven high-level groups. Notably, contracts classified as Facilities, Equipment, and Construction, displayed about 3.5 times the level of variance over the decade as total contract spending, and over 50 times the variance of spending on Weapons and Ammunition. Unlike the other categories, contracts for weapons ammunition did not spike at the end of the fiscal year.

DataLab also looked at USAspending data to determine the relationship between the passage of continuing resolutions, new appropriations, and the amount of spending on contracts across the government. Here’s what they found:

Continuing resolutions caused contract spending to spike in the same week, which was not observed for the passage of new appropriations. These findings cohere with qualitative research conducted by the Government Accountability Office (GAO), which noted in February 2018 that “some agency officials reported delaying contracts and application times for grants while under a [continuing resolution].” If agencies are unable to issue new contracts because adequate funds are not available under continuing resolutions, needs accumulate, and then are satisfied once funding is available.
Notably, DataLab found that the passage of new appropriations resulted in a statistically significant decreases in total contracts and especially on professional services contract spending. This suggests that new appropriations allow the government to engage in longer-term budgeting, potentially facilitating forward-looking spending decisions.
DataLab also noted that research and development spending was less variable and less impacted by continuing resolutions, suggesting that this type of service is likely to follow a distinct pattern for contract issuance from the typical cycles followed by other goods and services. As one of the smallest categories of spending, it is possible that this type of contract is partially sheltered from the timing of congressional appropriations.
Other categories showed evidence of very large spikes in spending in response to congressional appropriations, such as transportation and logistic services. Further research as to why specific types of spending are more reactive to continuing resolutions would need to be done to explain why.

To see this report, including trends displayed in graphs and tables, visit: https://datalab.usaspending.gov/contracts-over-time.html

The General Services Administration opened up bids to manage its vendor verification system — which ascribes a unique identifying number to each contractor doing business with the government — with the release of a request for proposals Aug. 31.

The Department of Defense has issued a class deviation raising the micro-purchase threshold to $10,000, effective immediately.

Innovation has become one of those words that has lost its meaning, particularly in the federal market.

DataLab, a unit operated by the U.S. Treasury Department, recently undertook an analysis of ten years of federal contract spending data. The results are thought-provoking.

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