HUBZone | The Contracting Education Academy

December 31, 2018 By cs

Manufacturer agrees to pay $400,000 to settle False Claims Act violations

The United States Attorney’s Office for the Middle District of Pennsylvania has announced that Arvco Container Corporation of Kalamazoo, MI has agreed to pay $400,000 to settle False Claims Act allegations in connection with a contract with the Defense Logistics Agency (DLA) in New Cumberland, PA.

Arvco Container Corporation (Arvco) violated subcontract limitations imposed by federal regulations and the terms of a contract to provide corrugated boxes to the federal government from August 3, 2010 through August 3, 2014. The contract was awarded by the DLA to Fibre Technologies LLC (Fibre) located in Reading, PA.

The contract was set-aside for eligible HUBZone small businesses in accordance with program requirements administered by the U.S. Small Business Administration (SBA).

Federal regulations and the terms of the contract limited Fibre’s ability to subcontract the manufacturing of the boxes to no more than 50 percent. Arvco performed 100 percent of the manufacturing requirement.

Arvco’s gross profits for the performance of the contract total $246,682 which will be returned to DLA. Arvco also agreed to pay a civil penalty amount of $153,318.

Limitations on subcontracting provisions in federal contracts are designed to ensure that otherwise ineligible businesses do not use small or disadvantaged businesses merely as vehicles to access set-aside contracts.

This case was investigated by the U.S. Attorney’s Office for the Middle District of Pennsylvania, the SBA’s Office of Inspector General, and the Defense Criminal Investigative Service.

Readers are reminded that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/usao-mdpa/pr/michigan-corrugated-manufacturer-agrees-pay-400000-settle-false-claims-act-violations

October 30, 2015 By cs

SBA watchdog warns of IT security risks, poor data in contracting goals

The Small Business Administration (SBA) has made solid headway in addressing most of its 10 major management and performance challenges, but took a step backward on information technology security, its inspector general reported.

SBA also falls short in verifying data and toughening enforcement to curb the number of large companies that improperly win contracts intended for small businesses, according to a report and score card released Oct. 15.

Noting that recent governmentwide security breaches have “heightened the importance of continuously monitoring networks and software applications,” the IG and an external auditor identified IT security “weaknesses when on-boarding and separating SBA personnel,” the report said. The agency lost ground over the past year in implementing such recommendations as reporting IT security weaknesses, segregating duty controls and assuring that “access controls are in place and operating effectively, and contractors are not granted system access until they have obtained the required background investigations and/or security clearances.”

On the SBA-led governmentwide effort to award 23 percent of all prime contracts to qualified small businesses, the score card provides ammunition to outside critics who argue that too many large firms are siphoning off contract set-asides.

Keep reading this article at: http://www.govexec.com/oversight/2015/10/sba-watchdog-warns-it-security-risks-poor-data-contracting-goals/122919

June 28, 2013 By cs

IRS severing ties with firm amid $500 million in questionable contracts

The Internal Revenue Service said Wednesday it is moving to cut ties with a favored software vendor after learning that one of the agency’s top procurement officials had improper contact with the firm’s owner, one of a handful of troubling revelations Congressional investigators have uncovered about the company.

The firm in question, Strong Castle, Inc., is at the center of separate investigations by the Treasury Inspector General for Tax Administration and the House Oversight and Government Reform Committee. Both have been probing allegations that the IRS’ deputy director for IT acquisition, Greg Roseman, gave preferential treatment and inside information to Strong Castle’s owner, who the committee called a longtime friend of Roseman.

Witnesses also claimed Strong Castle engaged in fraud to win its contracts, though evidence the investigations have publicly produced to date suggest the company’s activities fell within at least the letter of the law, if not its intent.

Keep reading this article at: http://www.federalnewsradio.com/?nid=534&sid=3372006&pid=0&page=1

June 7, 2013 By cs

IRS contractor loses SBA certification in bid protest decision

The Small Business Administration has revoked the Historically Underutilized Business Zone status of a contractor that has come under congressional scrutiny over nearly $500 million in IRS contracts from last year.

SBA spokeswoman Tiffani Clements told Federal Times in an email that Strong Castle Inc., was decertified as a so-called HUBZone contractor on May 23. The status gives contractors an edge in competing for federal work by being based in economically distressed areas.

Clements declined to provide further details, saying the decision letter contained confidential business information. Strong Castle is located on the 500 block of H Street N.W. in Washington’s Chinatown neighborhood.

Strong Castle, formerly Signet Computers, did not return email or phone messages this week.

The move by the SBA comes one month after the Government Accountability Office denied a protest from losing bidders who raised questions about whether Signet improperly qualified for HUBZone status.

Keep reading this article at: http://www.federaltimes.com/article/20130605/ACQUISITION03/306050007

March 12, 2012 By cs

Small Business panel advances six pro-contractor bills

A package of six bills designed to steer more federal contract opportunities toward small businesses cleared the House Small Business Committee last Wednesday (3/7/2012), amid bipartisan frustration at the Obama administration’s approach to helping what all parties see as a key sector for creating jobs.

The marked-up bills would raise the percentage of federal contracts that should go to small businesses, elevate agency Small and Disadvantaged Business Utilization offices, crack down on large firms hiding behind small business fronts to win contracts, and require agencies that insource previously contracted work to publish their rationale online and give contractors more of an opportunity to protest.

Other bills would clarify the eligibility of small businesses for multiple award contracts, bring in small businesses at an earlier stage of the bidding process, give priority to small firms in areas with high unemployment, open up more General Services Administration contracts for commercial purchases to small businesses, and provide more training for Small Business Administration-based procurement center representatives.

Noting that the government spends $500 billion annually in contracting, committee Chairman Rep. Sam Graves, R-Mo., said, “improving small business opportunities is a triple play — small businesses win more contracts; workers win as the small businesses create jobs; and taxpayers win because small businesses bring competition, innovation and lower prices to save the government money.”

Perhaps the most far-reaching bill is the chairman’s own (H.R. 3850), the Government Efficiency Through Small Business Contracting Act, which would raise the governmentwide small business contracting goal from 23 percent to 25 percent. Graves estimated it would provide $11 billion in new work for small business. It also would raise the current goal of giving 35.9 percent of subcontracting to small businesses to 40 percent. The other bills are the Small Business Advocate Act (H.R. 3851), Subcontracting Transparency and Reliability Act (H.R. 3893), Small Business Opportunity Act (H.R. 3980), Early Stage Small Business Contracting Act (H.R. 4121) and Small Business Procurement Improvement Act (H.R. 4118).

Though most of the markup action appeared bipartisan, some Democrats were uneasy with the insourcing transparency requirement. Rep. Nydia Velazquez, D-N.Y., the panel’s ranking member, said it might encourage costly litigation and clog the Government Accountability Office with protests instead of creating jobs. Rep. Judy Chu, D-Calif., said businesses that lose contracts already have resources to challenge the decisions and noted insourcing of inherently governmental activities has been codified twice in Defense authorization acts.

There also was disagreement over set-asides for economically and socially disadvantaged businesses. An amendment Rep. Gary Peters, D-Mich., offered would have raised the set-aside from 5 percent of the total value of a prime contract to 7.5 percent. It was withdrawn pending further negotiations before floor action.

“I’ve tried not to favor one group of small businesses over another — I don’t want to pick winners and losers, I want to help all small businesses compete,” Graves said. “Right now, we have one small business goal, and four subcategory goals — women, service-disabled veterans, [Historically Underutilized Business Zone] firms and small disadvantaged businesses. Each of the subcategories of small businesses can compete for small business contracts, so they all win when we increase the overall small business goal,” he added. “However, when we increase the small disadvantaged business goal, only about 9,200 firms benefit, instead of the 350,000 small businesses currently seeking to do business with the government.”

The hearing began with approval of the committee’s comments on President Obama’s fiscal 2013 budget request for SBA. No one from the administration appeared to discuss it. Members of both parties complained the budget avoids tough choices, fails to cut duplicative programs and funds pilot projects not authorized by Congress.

A spokeswoman said SBA worked hard with the committee to lock down a hearing date on short notice, but could not make it on the one day that worked for the panel. Agency officials have, however, briefed congressional staff members and made an effort to answer all their questions about the fiscal 2013 budget, she said.

SBA declined to comment on the contractor legislation. The committee is scheduled to consider more contracting bills in the coming weeks.

Before the markup, the Professional Services Council, a contractors trade group, sent a letter backing most of the bills, but opposing some provisions. “We’re particularly pleased to see legislation that would protect small businesses from improper insourcing activities, ensure that no small business is deemed ineligible for small business programs because of SBA’s improper approach to calculating industry category size standards, and elevate the role of small business advocates in the contracting process,” President and Chief Executive Officer Stan Soloway said.

But he added, “Congress should not raise the small business prime contracting or subcontracting goals until it has accurate data about total small business participation in the federal marketplace at both the prime and subcontract levels.”

— by Charles S. Clark, Government Executive, March 8, 2012 at http://www.govexec.com/contracting/2012/03/small-business-panel-advances-six-pro-contractor-bills/41414

The Small Business Administration (SBA) has made solid headway in addressing most of its 10 major management and performance challenges, but took a step backward on information technology security, its inspector general reported.

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