8(a) | The Contracting Education Academy

May 4, 2017 By AMK

Former Native corporation exec alleges ‘sham companies’ get government contracts

The Afognak Village Corporation, with 1,000 shareholders, operates about two dozen companies with nearly 5,000 employees across the United States and overseas.

Its national and worldwide reach with hundreds of millions in contracts grew from subsidiaries that qualify for Small Business Administration contracting preferences with the Department of Defense, the Federal Emergency Management Agency, the Air Force, the Navy, the Army, the Marines, the Coast Guard and other agencies.

The company describes its shareholders as descended from the village of Afognak, which was on an island just north of Kodiak hit hard by the tsunami that followed the 1964 earthquake.

Its website features 382 job listings from Japan to Alabama and from Guantanamo Bay to Iraq. Afognak ranked 130th of the top 200 federal contractors in fiscal year 2015, according to a Bloomberg analysis, with $406 million in obligations.

The process by which it emerged as a federal contracting heavyweight is at the heart of a whistleblower lawsuit with legal bills in the millions that is slowly progressing in federal court in Alaska.

According to the lawsuit filed by a former company official, Afognak and its wholly owned subsidiary, Alutiiq, LLC, created “sham” companies to become eligible for more federal contracts than allowed.

Keep reading this article at: https://www.adn.com/opinions/2017/04/25/former-native-corporation-exec-alleges-sham-companies-get-government-contracts/

April 25, 2017 By AMK

High court asked to review SBA disadvantaged biz program

An information technology contractor has asked the U.S. Supreme Court to review a D.C. Circuit decision upholding the U.S. Small Business Administration‘s 8(a) program for disadvantaged small businesses, arguing the panel’s majority failed to recognize that the program involves racial classification that requires strict scrutiny.

Rothe Development Inc., a nonminority-owned small business that mostly bids on federal defense contracts, filed a petition for a writ of certiorari after the D.C. Circuit denied panel and full-body rehearings of its split September opinion. In a 2-1 decision, a three-judge panel rejected Rothe’s challenge to the law underpinning the 8(a) program, ruling that the program was not unconstitutionally based on race.

However, in Rothe’s petition, filed on April 13, the contractor argued that until the panel issued its majority decision, Congress, the federal government and the courts had all recognized that the statutory provisions of the program use race-conscious means “to distribute burdens and benefits.” The panel’s assertion that the law implementing the program is race-neutral on its face ignores the plain language of the statute, Rothe said.

“In sum, the statutory provisions of the Section 8(a) program contain a paradigmatic racial classification because they distribute burdens and benefits on the basis of race,” Rothe said. “Because the panel majority’s contrary conclusion and failure to apply strict scrutiny are irreconcilable with the plain language of the provisions and this court’s precedents, review is warranted.”

Keep reading this article at: https://www.law360.com/publicpolicy/articles/914715/high-court-asked-to-review-sba-disadvantaged-biz-program

January 4, 2017 By AMK

DoD contractor agrees to $4.5 million settlement for alleged False Claim Act violations

Advanced C4 Solutions, Inc. has agreed to pay $4.535 million to the United States to settle allegations that it submitted inflated invoices to the government for work performed at Joint Base Andrews.

Advanced C4 Solutions, Inc. is a Florida-based company that was operating as an 8(a) small business certified by the Small Business Administration (SBA). On June 10, 2010, Advanced C4 was awarded a contract to supply project management and labor services for an Air Force technology project. The contract was awarded by the U.S. Navy’s Space and Warfare Systems Command (SPAWAR), which was administering the contract in support of the United States Air Force.

Among other things, the contract required the Advanced C4 to design, construct, and implement certain local area network and wide area network systems that would be utilized by Air Force personnel and other components of the U.S. Armed Forces on Joint Base Andrews in Maryland. The contract required the company to accurately provide invoices to the United States for work performed under the contract, including work by subcontractors. Labor costs were required to be billed according to the job classifications set forth in the contract and the number of labor hours worked by personnel at each job classification. The contract also provided that the Advanced C4 could only utilize pre-approved subcontractors. Pursuant to this provision, the company entered into subcontractor agreements with several entities, one of which was Superior Communication Solutions, Inc. (SCSI).

spawar Advanced C4 Solutions and its subcontractors began work under the SPAWAR contract in June 2010. Andrew Bennett was the Advanced C4’s project manager who was tasked with overseeing the work performed by the company and its subcontractors under the contract. In this capacity, Bennett was responsible for verifying the accuracy of all invoices submitted by subcontractors to the company and, in turn, all the invoices submitted by the company to SPAWAR.

The settlement agreed to on Dec. 28, 2016 resolves allegations that Bennett, while an employee of Advanced C4, knew that SCSI created false invoices that charged for labor hours that were not actually worked, and charged the United States at job classification rates for personnel that did not have the requisite credentials to be billed at those rates, and yet submitted those SCSI invoices to the government for payment anyway. SPAWAR subsequently paid these invoices not knowing they were false.

In related cases, Bennett, of Tampa Florida, James T. Shank, of Perry, Georgia, and a third individual were indicted on federal criminal charges related to their actions in this matter. Bennett and Shank pled guilty to conspiracy to commit wire fraud for their conduct related to the SPAWAR contract. The third defendant is scheduled for trial beginning on January 30, 2017.

Source: https://www.justice.gov/usao-md/pr/defense-contractor-agrees-4535-million-settlement-alleged-false-claim-act-violations

October 4, 2016 By AMK

D.C. Circuit upholds constitutionality of SBA’s 8(a) program

Last month, in Rothe Development, Inc. v. Department of Defense, the D.C. Circuit upheld the constitutionality of the Small Business Administration (“SBA”) 8(a) program by rejecting arguments that the Small Business Act contains an unconstitutional classification based on race.

8a-decision-sept-2016 The goal of the SBA’s 8(a) program is to expand government contracting opportunities to small business owners. Under the Small Business Act, the SBA enters into contracts with other federal agencies, which the SBA then subcontracts to eligible small businesses to compete for subcontracts in a sheltered market. Businesses owned by “socially and economically disadvantaged” individuals are eligible to participate in the 8(a) program.

Per the statute, socially disadvantaged individuals are those “who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.”

Keep reading this article at: https://www.insidegovernmentcontracts.com/2016/09/d-c-circuit-upholds-constitutionality-sbas-8a-program/

September 28, 2016 By AMK

The thin legal case for affirmative action in contracting

Affirmative action in government contracting is alive — barely.

On September 9, 2016, a federal appeals court upheld a Small Business Administration program that gives advantages to people who have suffered racial discrimination, reasoning that the law as written doesn’t discriminate on the basis of race, because anyone can be the target of racial bias. The decision, which is based on paper-thin legal logic, is an attempt to keep remediation-based affirmative action from disappearing altogether. It may be too little, too late.

The program, known as 8(a) after the section of the Small Business Act in which it appears, gives a preference in government contracting to small businesses owned by “socially and economically disadvantaged” individuals. The law defines the socially disadvantaged as people “who have been subjected to racial or ethnic prejudice or cultural bias because of their identity as a member of a group without regard to their individual qualities.”

If this sounds like race-based affirmative action, that’s because it is. The SBA regulations implementing the law create a presumption that any member of racial minority has been subject to bias. Unless the presumption is overcome by evidence that the business owner hasn’t suffered discrimination — a pretty unlikely scenario — the program functions to give minority business owners an advantage.

Back in the day, the racial preference wouldn’t have been a legal problem. The original theory of affirmative action was precisely to remedy past discrimination by giving an advantage to those who had suffered its effects, namely racial minorities.

Keep reading this article at: https://www.bloomberg.com/view/articles/2016-09-13/the-thin-legal-case-for-affirmative-action-in-contracting

The Afognak Village Corporation, with 1,000 shareholders, operates about two dozen companies with nearly 5,000 employees across the United States and overseas.

Advanced C4 Solutions, Inc. has agreed to pay $4.535 million to the United States to settle allegations that it submitted inflated invoices to the government for work performed at Joint Base Andrews.

Last month, in Rothe Development, Inc. v. Department of Defense, the D.C. Circuit upheld the constitutionality of the Small Business Administration (“SBA”) 8(a) program by rejecting arguments that the Small Business Act contains an unconstitutional classification based on race.

Affirmative action in government contracting is alive — barely.

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