OIG | The Contracting Education Academy

January 20, 2020 By cs

Businessman who tried to ‘own every dog on the track’ sentenced for conspiring to bribe VA contract specialist

The Justice Department announced in Denver last week the sentencing of a businessman who engaged in a conspiracy with a Veterans Affairs’ contracting official to manipulate contract awards to benefit a consulting company that purportedly represented service-disabled veteran owned small businesses.

Anthony Bueno was sentenced to serve 30 months in federal prison, followed by 3 years of supervised release, for his role in a conspiracy to bribe a VA official so that clients of his company would gain an unfair advantage in the VA contracting process. Bueno was remanded into custody immediately after the sentencing hearing.

The VA’s contracting official, Dwane Nevins, previously pleaded guilty in September 2019 to every count of an indictment charging him with this scheme, including counts of conspiracy, receiving bribes, extortion, and criminal conflicts of interests. He is scheduled to be sentenced on February 19, 2020.

According to court records:

Bueno and his business partner, Robert Revis, agreed to help an undercover FBI agent, who was posing as a veteran and small business owner, bribe Nevins, a contracting specialist at the VA’s Network Contracting Office in Colorado.
As part of the bribery scheme, Bueno and Revis, working with Nevins, agreed to submit bids from small businesses owned by veterans disabled during military service (one of whom was the undercover FBI agent) under contract with Buenon and Revis’ consulting company so that federal contracts would be set aside for only those companies.
As Bueno explained to the undercover agent, the conspirators would then “own all the dogs on the track,” meaning their clients were guaranteed to get the contracts.
Bueno, Revis and Nevins worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to the consulting company, or by asking the consulting company’s clients to pay Nevins directly for sham training classes related to federal contracting.

Robert Revis pleaded guilty in April 2019 to an Information charging him with a single count of supplementing the salary of a federal official. His sentencing hearing is scheduled for March 2, 2020. Bueno pleaded guilty on September 17, 2019.

Bueno has also pleaded guilty to conspiring to launder money arising from a completely separate wire fraud scheme in which he used false representations about investment opportunities to take over a million dollars from several victims. Sentencing in that case, pending before United States District Judge William J. Martinez, is scheduled for January 23, 2019.

The case was jointly investigated by the Federal Bureau of Investigation, the U.S. Department of Veterans Affairs Office of Inspector General, with substantial assistance from the U.S. Small Business Administration Office of Inspector General.

Source: https://www.justice.gov/usao-co/pr/businessman-sentenced-two-and-half-years-imprisonment-conspiring-bribe-veterans-affairs

December 16, 2019 By cs

Is government’s disability procurement program eroding?

The AbilityOne Commission faces compliance and resource challenges heading into the new year, according to its inspector general.

The federal organization responsible for ensuring that government agencies acquire goods and services from contractors that employ blind and other significantly disabled workers is in a tight spot, the AbilityOne Commission’s Inspector General found in a Dec. 2 report noting several management challenges that threaten the program’s stability.

The AbilityOne program, which has existed in some fashion since 1938, requires government agencies to make sure that a certain amount of their purchases come from contractors that fulfill the requirements for blind and disabled employees. But other procurement programs with conflicting priorities and a lack of sufficient resources mean that the program has experienced an “erosion” of its statutory authority.

Keep reading this article at: https://www.federaltimes.com/acquisition/2019/12/03/is-governments-disability-procurement-program-eroding-away

April 30, 2019 By AMK

Watchdog questions NSA’s $636 million in award fee incentive contracts

The highly secretive National Security Agency may have relied too heavily on the contractor incentives provided in cost-plus award fee contracts, according to a new inspector general report calling into question some $630 million in awards.

A review of 54 contracts awarded using that method in fiscal years 2016 and 2017 showed that more than half “did not have a valid Determination and Finding justifying use of this contract method,” the NSA inspector general said in an April 3 report. Fifty-one of the 54 “lacked the required cost-benefit analysis of the expected benefits versus the additional administrative costs of monitoring and evaluating the contractor’s performance.”

The review was launched “because of the magnitude of the agency award fee contract pools and the significant potential financial risk to the agency and administrative burden associated with effectively managing award fee contracts,” the IG said.

So-called award fee contracts have long been permitted under the Federal Acquisition Regulation for work of a nature that makes it neither feasible nor effective to devise predetermined objective targets applicable to cost, schedule and technical performance, the report noted. Such awards are also appropriate if the likelihood of a company meeting the agency’s acquisition objectives will be enhanced by using a contract that “effectively motivates the contractor toward exceptional performance and provides the government with the flexibility to evaluate both actual performance and the condition under which it was achieved.

Keep reading article at: https://www.govexec.com/contracting/2019/04/watchdog-questions-nsas-636-million-award-fee-incentive-contracts/156173/

April 8, 2019 By AMK

OIG seeks voluntary refund despite contractor’s adherence to TINA requirements

DoD’s Office of Inspector General (OIG) for the Department of Defense (DoD) has recommended that a contractor be requested to provide a refund based on “excessive profits.”

On February 25, 2019, the Office of Inspector General (OIG) for the Department of Defense (DoD) issued an audit report analyzing the prices of spare aviation parts purchased by the Defense Logistics Agency (DLA) and the Army from TransDigm Group, Inc.

The audit was conducted in response to letters from certain Members of Congress, who had inquired whether the spare parts were sold at fair and reasonable prices and in compliance with the Truthful Cost or Pricing Data Act (formerly known as the Truth in Negotiations Act or TINA).

The OIG’s audit confirmed that both TransDigm and the responsible DoD contracting officers fully complied with the Act and related regulations governing the price negotiations, but the OIG nonetheless concluded that the contractor earned excess profit on the majority of parts sold. In a highly unusual move, the OIG recommended that DoD request a “voluntary refund” from TransDigm of its allegedly “excessive” profits, and the OIG also recommended a number of changes to statutory, regulatory, and administrative policies governing the provision of cost or pricing data.

The OIG’s Findings

At the request of U.S. Representatives Ro Khanna and Tim Ryan and Senator Elizabeth Warren, the OIG reviewed the price reasonableness of 47 spare aircraft parts DoD procured from TransDigm between January 2015 and January 2017. Using uncertified cost or pricing data that it collected during the audit, the OIG calculated the apparent profit realized by the contractor on the sale of each part, and concluded that the contractor realized “unreasonable” profits (defined as profits of greater than 15% in the report) on all but one of the parts. (The OIG arrived at the 15 percent profit percentage, in part, by looking at maximum profit percentages allowed in the FAR for three different types of contracts, none of which were fixed price.) The OIG applied this finding to a broader sampling of contracts held by TransDigm, and concluded that the contractor had earned $16.1 million in “excess profit” (i.e., profit over 15 percent) for the parts at issue.

The OIG concluded that a number of factors contributed to these supposedly “excessive” profits.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2019/03/when-compliance-is-not-enough-oig-seeks-voluntary-refund-despite-contractors-adherence-to-tina-requirements/

The AbilityOne Commission faces compliance and resource challenges heading into the new year, according to its inspector general.

The highly secretive National Security Agency may have relied too heavily on the contractor incentives provided in cost-plus award fee contracts, according to a new inspector general report calling into question some $630 million in awards.

Efforts by the General Services Administration to protect data gathered by its building lease support services providers got tangled in internal contracting rules, according to an inspector general report.

DoD’s Office of Inspector General (OIG) for the Department of Defense (DoD) has recommended that a contractor be requested to provide a refund based on “excessive profits.”

The OIG’s Findings

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