preference | The Contracting Education Academy

June 16, 2016 By AMK

Supreme Court gives VA new marching orders

In a U.S. Supreme Court decision handed down today, the Department of Veterans Affairs (VA) was directed to change its contracting practices.

The Court’s June 16, 2016 ruling in Kingdomware Technologies, Inc. v. United States, No. 14-916 means that the VA can no longer chose to ignore a 2006 law that requires the VA to restrict contract competitions to veteran-owned small businesses (VOSBs) as long as there are at least two qualified VOSBs available to perform the work. This provision of the Veterans Benefits, Health Care, and Information Technology Act of 2006 (“the Act”) is known as the “Rule of Two.”

The VA long argued that it had the discretion to not follow the “Rule of Two” when it placed orders against GSA Schedule contracts. But the Court found the following provision of the Act to be unambiguous:

… a contracting officer of the Department shall award contracts on the basis of competition restricted to small business concerns owned and controlled by veterans if the contracting officer has a reasonable expectation that two or more small business concerns owned and controlled by veterans will submit offers and that the award can be made at a fair and reasonable price that offers best value to the United States.

It is not yet known how quickly the VA will change is practices with respect to GSA Schedule orders. But the Court has made it clear that the Rule of Two is mandatory, not discretionary — and there’s no exception for GSA Schedule orders.

Read the Supreme Court decision here: http://www.supremecourt.gov/opinions/15pdf/14-916_6j37.pdf

April 14, 2016 By AMK

SBA gets 8(a) applications right only 37% of the time in sample by OIG

The Small Business Administration (SBA) is failing to adequately screen the eligibility of small businesses applying for the federal government’s longest-standing contract preference program.

In an examination of applications for the 8(a) Program by the SBA’s Inspector General, 30 of 48 applicants did not meet one or more areas of eligibility,

The Office of Inspector General’s (OIG’s) Audit Report 16-13, SBA’s 8(a) Business Development Program Eligibility, presents the results of the OIG’s audit of the 8(a) Program. The 8(a) Program provides economically and socially disadvantaged, small business owners with business development assistance and preference-based Federal contracts.

SBA’s Director of the Office of Certification and Eligibility (OCE) and the Associate Administrator for Business Development (AA/BD) gathered additional information for 18 firms and, based on this information, approved the firms into the 8(a) Program. However, for the remaining 30 firms, the AA/BD approved the firms without full documentation in the agency’s Business Development Management Information System (BDMIS) on how all areas of concern regarding eligibility raised by lower-level reviewers were resolved. As a result, it was not clear whether these 30 firms should have been approved into the 8(a) Program.

During the past year within SBA, the 8(a) Program has experienced a change in leadership, identified an aggressive growth plan for the coming years, began testing a streamlined application process, and shifted responsibilities for continuing eligibility reviews. In its report to SBA leadership, the OIG encourages management to ensure the documentation supporting 8(a) Program application approvals is maintained in a method ensuring clear eligibility of the applicant.

The OIG made two specific recommendations to improve SBA’s eligibility determination process for the 8(a) Program:

Update policy to require the AA/BD and OCE’s director to clearly document their justification for approving or denying applicants into the 8(a) Program, particularly when those decisions differed from lower-level recommendations.
Provide documentation on how eligibility concerns raised by lower-level reviewers were resolved for the 30 firms not documented in BDMIS by April 11, 2016.

A copy of the full report by the SBA’s OIG can be found here: https://www.sba.gov/sites/default/files/oig/16-13_SBAs_8a_Business_Development_Program_Eligibility.pdf

January 9, 2015 By AMK

Former security contractor CEO agrees to pay $4.5 million to settle civil claims

Keith Hedman, 55, of Arlington, Virginia, the former chief executive officer of a Virginia-based security contracting firm, Protection Strategies, Inc. has agreed to pay $4.5 million to settle civil claims relating to his involvement in a fraudulent scheme to create a front company to obtain contracts through the Small Business Administration’s Section 8(a) program. The Section 8(a) program allows qualified small businesses to receive sole-source and competitive-bid contracts set aside for minority-owned and disadvantaged small businesses.

Dana J. Boente, U.S. Attorney for the Eastern District of Virginia, made the announcement after the settlement agreement was signed by both parties. “The civil settlement illustrates the importance of not stopping at a criminal resolution when a defendant has pled guilty to fraud against the government,” said U.S. Attorney Boente.

The settlement resolves civil claims against Hedman relating to the criminal plea entered by him in U.S. v. Hedman,1:13cr74. According to court records, in or about 2001 Hedman formed PSI, which was approved to participate in the 8(a) program based on the 8(a) eligibility of its listed president and CEO, an African-American female. When the listed president and CEO left PSI in 2003, Hedman became its sole owner, and the company was no longer 8(a)-eligible.

Keep reading this article at: http://www.alexandrianews.org/former-security-contractor-ceo-agrees-to-pay-4-5-million-to-settle-civil-claims/

June 28, 2013 By AMK

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

December 28, 2012 By AMK

Alaska native firm played role in failed medical review board software project

Work on a botched program to develop software for the Defense Medical Examination Review Board was performed by an Alaska native company, said Steven Davis, a spokesman for the Space and Naval Warfare Systems Command. The command’s Atlantic center contracted with software engineering firm Barling Bay LLC to support development of a medical records system that has come under fire for failing so severely that responsibility for the work was transferred to the General Services Administration.

Barling Bay is a subsidiary of Three Saints LLC, a holding company headquartered in Anchorage. Under federal law, Alaska native firms receive preferential treatment in government contracts.

Sen. Claire McCaskill, D-Mo., chairwoman of the contracting oversight panel for the Homeland Security and Governmental Affairs Committee, charged in a Dec. 7 letter to Chief of Naval Operations Adm. Jonathan Greenert that SPAWAR’s management of the contract for service academy exams was “so inadequate that the General Services Administration had to assume responsibility.” The review board determines the medical qualification of more than 50,000 applicants annually for appointment to a U.S. service academy, the Uniformed Services University of the Health Sciences and the Reserve Officer Training Corps.

Keep reading this article at: http://www.nextgov.com/health/2012/12/alaska-native-firm-played-role-failed-medical-review-board-software-project/60280/?oref=govexec_today_nl

In a U.S. Supreme Court decision handed down today, the Department of Veterans Affairs (VA) was directed to change its contracting practices.

The Small Business Administration (SBA) is failing to adequately screen the eligibility of small businesses applying for the federal government’s longest-standing contract preference program.

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