Coast Guard | The Contracting Education Academy

November 18, 2011 By AMK

Man indicted for fraudulently winning gov’t contracts set-aside for service disabled vets

A federal grand jury indicted a Luthersville man this week on charges of getting $2.85 million in government contracts by fraudulently claiming his business was controlled by a veteran.

Arthur Wayne Singleton, a 62-year old construction contractor, defrauded programs that set aside certain government contracts for businesses owned and controlled by disabled veterans, according to a federal indictment.

“This defendant allegedly took advantage of a service-disabled veteran of the Vietnam War, using the veteran’s name and disabled status to gain millions of dollars in federal contracts,” U.S. Attorney Sally Quillian Yates said. “Fraud like this deprives legitimate disabled veteran-owned small businesses of the opportunity to enter into construction contracts with the government.”

Attempts to reach Singleton or his lawyer Brian Steel for comment were unsuccessful.

The contract program is an important resource for disabled vets because they are often discriminated against in employment and business opportunities, said David Autry, spokesman for the Disabled American Veterans in Washington DC.

“For whatever reason,” he said, “people prefer not to do business with them.”

Singleton approached a bed-ridden Vietnam vet, identified in the indictment only as “GT”, in 2007 and proposed they form a joint venture called GMT Mechanical that could take advantage of set-aside construction contracts from the federal government, according to the indictment. GT suffers from severe knee injuries and other health issues as a result of his service. Singleton, who had more than 30 years of construction and federal contract experience, completely controlled the enterprise, the indictment said, and federal rules required the disabled veteran to control the business and own 51 percent.

Singleton secured contracts from the Department of Veterans Affairs, the Department of Agriculture, the U.S. Coast Guard and the U.S. Army Corps of Engineers for construction projects around the country. According to the indictment, Singleton paid GT $17,964 because he said he had “to make it look as though GT was part of the business.”

The U.S. Attorney’s office has not indicted GT but declined to say whether he was a cooperating witness.

The payment to GT followed an inquiry by the VA, which sent a letter in February 2008 stating GMT Mechanical wasn’t eligible for “service-disabled veteran-owned contracts” because GT didn’t control the business or own 51 percent of it. But Singleton went ahead and submitted bids for a $290,000 contract in Iowa with the Agriculture Department, a $96,000 contract in Wyoming with the Homeland Security Department and a $1.375 million contract in North Dakota with the Defense Department and forged GT’s signature on the bids, according to the indictment.

— by Steve Visser, The Atlanta Journal-Constitution, 5:41 p.m. Thursday, November 10, 2011. Find this article at: http://www.ajc.com/news/atlanta/man-accused-of-defrauding-1222311.html

October 25, 2011 By AMK

Procurement chief defends Obama’s commitment to small business

A proposed rule to curb agencies’ little used capacity to offer higher payments to needier contractors “will have no impact on the government’s ability or commitment to drive contracting opportunities for small disadvantaged businesses,” Dan Gordon, administrator of the White House Office of Federal Procurement Policy, said Friday.

In a blog post for the Office of Management and Budget, Gordon sought to reassure some in the minority business community that a proposed regulation issued in September by the Small Business Administration is a routine “housekeeping” tool designed to catch the law up with a 2008 court ruling that declared such price premiums unconstitutional.

“The proposed rule in no way changes the fundamental policies, practices or programs that agencies have been using in recent years to achieve strong SDB participation in the federal marketplace, including the goal of awarding 5 percent of federal procurement dollars to SDBs,” Gordon wrote.

The affected agencies — the Defense Department, NASA and the U.S. Coast Guard — have not used price premiums to attract disadvantaged small contractors in years, Gordon noted. But the administration has “been working with the Minority Business Development Agency to strengthen the bond between contracting, small business and program offices at every agency,” Gordon wrote. “Since the beginning of [fiscal] 2009, agencies have awarded more than $85 billion in contracts to SDBs, exceeding the goal of awarding at least 5 percent of contract dollars to SDBs.” In fiscal 2010, he added, contract awards to small disadvantaged businesses accounted for 7.95 percent of all eligible contract dollars, “well above the goal.”

Gordon’s clarification came as the Obama administration readied a new set of executive actions designed to spur job creation in large and small businesses while Congress debates the president’s larger proposed jobs package.

The perception among some that ending premium payments to disadvantaged businesses was a pullback in the administration’s commitment was rejected by Molly Brogan, vice president of public affairs for the National Small Business Association. “At the end of the day, small businesses just want a level playing field,” she told Government Executive. “Ensuring that small businesses — including SDB businesses — have a fair opportunity to compete for federal dollars ought to be the No. 1 goal. We don’t believe this new rule will change [that] in any way.”

Raul Espinosa, founder of a Jacksonville, Fla. – based university nonprofit called the Fairness in Procurement Alliance, which has been pressing for stronger rules on accelerating payments to small disadvantaged businesses, said he was grateful for the administration’s overall effort, but worries it might be “lip service.” Changes “will mean nothing unless they’re codified into the federal acquisition regulation and referred to in actual contracts,” he said.

— by Charles S. Clark – Government Executive – October 24, 2011 – http://www.govexec.com/story_page.cfm?articleid=49130&dcn=e_tma

August 25, 2011 By AMK

Government sues, alleging contractor botched Coast Guard acquisition

The federal government is seeking financial damages from Bollinger Shipyards Inc. and accusing the company of falsifying statements to the Coast Guard that resulted in eight “unseaworthy” boats being delivered under the Deepwater acquisition program, the Justice Department announced.

Bollinger proposed to convert existing the Coast Guard’s 110-foot patrol boats into 123-foot boats by extending the hulls. The Coast Guard awarded a contract to convert eight vessels; however, the first completed vessel suffered hull failure when put into service.

In investigation concluded that Bollinger exaggerated the hull strength that would be achieved in the reconstructed vessels, the department said in statement released Aug. 17.

“The calculation of hull strength reported by Bollinger to the Coast Guard prior to the conversion was false,” Justice said in the statement.

The government’s lawsuit seeks damages from Bollinger under the False Claims Act for the “loss of the eight now unseaworthy vessels,” the statement said.

The amount of damages being sought was not specified. However, the Coast Guard, in the lawsuit, said it had paid Bollinger $78 million to date, according to an article in the New Orleans Times-Picayune.

“Companies which make false statements to win Coast Guard contracts do a disservice to the men and women securing our borders,” Tony West, assistant attorney general for Justice’s civil division, said in the statement. “We will take action against those who undermine the integrity of the public contracting process by providing substandard equipment to our armed services personnel.”

The Times-Picayune also obtained a statement from Bollinger, in which the company denied any wrongdoing.

Bollinger has a “spotless record for honest and fair dealing with every customer, including the U.S. Navy and Coast Guard, our largest customer,” the company said in the statement, according to the news report. “Throughout this process, Bollinger has been open and cooperative with the government, and we remain committed to providing the government all necessary information and assistance to bring this matter to a close,” the statement said. “Bollinger has tried to find a way to resolve this matter short of litigation, but we are fully prepared to defend our good name aggressively in a court of law.”

The Coast Guard began the multibillion-dollar Deepwater program in 2002 to modernize its fleet of ships, cutters, boats and other assets. A contract for lead systems integration was awarded to a joint venture owned by Lockheed Martin Corp. and Northrop Grumman Corp. Bollinger was awarded a number of construction contracts under the Deepwater umbrella.

After the hull failures of the converted 123-foot cutters, the Coast Guard took the eight converted boats out of service in 2007. Facing other difficulties and rising costs, the agency also took over the lead systems integrator role over the troubled program.

According to a report from the Government Accountability Office, the latest cost estimate for Deepwater assets is $29 billion, up from $24 billion in 2007.

— About the Author: Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Washington Technology. Published Aug. 18, 2011 at http://washingtontechnology.com/articles/2011/08/18/coast-guard-false-claims-lawsuit-bollinger.aspx?s=wtdaily_190811

August 3, 2011 By AMK

Coast Guard drowning in Deepwater cost overages

Total costs for the Coast Guard’s Deepwater boat and ship replacement program could rise by another $5 billion and even higher, according to a new report from the Government Accountability Office.

The Coast Guard took over as lead systems integrator for the troubled contracting program in 2007 and established a $24.2 billion program baseline. The Coast Guard recently indicated that total acquisition costs could be as much as $29.3 billion, according to the report from the GAO released July 28.

But even that larger estimate likely falls short of the true total costs because the Coast Guard has not revised baselines for all assets, including the Offshore Patrol Cutter, one of the costliest assets in the program, the auditors said.

Also, the agency has further revised its schedule, which has not been fully reflected in the most recent cost estimate, the GAO report states. Furthermore, the reliability of cost estimates for some assets is questionable because the Coast Guard did not follow best practices.

“The Deepwater Program as a whole continues to exceed the cost and schedule baselines approved by DHS in May 2007, but several factors preclude a solid understanding of the true cost and schedule of the program,” the GAO report states, adding that “additional cost growth is looming.”

“The Coast Guard and Homeland Security Department officials agreed that the annual funding needed to support all approved Deepwater acquisition program baselines exceeds current and expected funding levels, particularly in this constrained fiscal climate,” the GAO said.

Coast Guard acquisition officials expect that up to $1.9 billion a year would be needed to support the stated baseline, while anticipating a maximum of $1.2 billion a year. As such, the Deepwater program goals are “unachievable.”

GAO auditors said the situation of managing a portfolio expected to exceed the appropriated budget is likely to lead to “unhealthy competition for funding” among programs within the portfolio.

“Over the past four years, the Coast Guard has strengthened its acquisition management capabilities in its role as lead systems integrator and decision maker for Deepwater acquisitions,” the GAO report states. “Now, the Coast Guard needs to take broader actions to address the cost growth, schedule delays, and expected changes to planned capabilities that have made the Deepwater program, as presented to Congress, unachievable.”

The GAO made nine recommendations, including that the Coast Guard consider identifying tradeoffs to the planned Deepwater fleet and take other actions to increase confidence that assets would meet mission needs. DHS officials agreed with the recommendations.

About the Author: Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Defense Systems. This article was published 7/29/2011 at http://defensesystems.com/articles/2011/07/29/deepwater-costs-rising.aspx?sc_lang=en.

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