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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

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VA official charged with taking bribes to help associates rig federal contracting process

Three men were arrested in Colorado on Wednesday of this week pursuant to warrants issued in connection with an indictment charging them with conspiring to pay and receive bribes in exchange for creating an opportunity to commit a fraud against the U.S.  Department of Veterans Affairs (VA). 

The defendants are also charged with paying and receiving bribes, or aiding and abetting the payment of bribes.

Dwane Nevins, a VA contracting official at the time of the alleged crimes, was separately charged in another count with extortion under color of official right and in two counts with violating the federal conflict of interest statute.

The following is alleged in the indictment:

  • Dwane Nevins — a small business specialist at the VA’s Network Contracting Office in Colorado — agreed to take bribes offered by Robert Revis, Anthony Bueno and an undercover FBI agent to help them manipulate the process for bidding on federal contracts with the VA.
  • Revis and Bueno, working with Nevins, agreed to submit fraudulent bids from service-disabled-veteran-owned small businesses under contract with their consulting company so that federal contracts would be set aside for only those companies.  As Bueno allegedly explained, they would then “own all the dogs on the track.” 
  • Nevins, Bueno and Revis worked to conceal the nature of the bribe payments by either kicking back to Nevins a portion of the payments made to their consulting company, or by asking their consulting company’s clients to pay Nevins for sham training classes related to federal contracting.

The indictment also alleges that, after complaining about not being paid by Revis and Bueno for his participation in the scheme, Nevins used his official position at the VA to extort approximately $10,000 from an undercover FBI agent, telling the agent that “the train don’t go without me.  You know what I mean?  I’m the engine.  I’m the caboose.  I’m the engine room.”  Nevins also allegedly told the undercover FBI agent: “This is a business and businessmen need to get paid . . . . so I can have my Christmas, you know what I’m saying?”

The indictment alleges that the conspirators attempted to rig the process related to two particular contracts, both of which related to medical equipment and not to the construction of any VA facilities.  The first contract related to the procurement of LC bead particle embolization products by a VA hospital in Salt Lake City, and the second contract related to the procurement of durable medical equipment for VA facilities located throughout the region.

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

Readers are reminded that the defendants are presumed innocent unless and until proven guilty in a court of law.

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SBA IG: 89 percent of WOSB sole source contracts were improper

Nearly 90% of women-owned small business sole source contracts reviewed by the SBA Office of Inspector General (OIG) were improper, according to a startling report issued last week.

In the study, the SBA OIG concluded that because of pervasive flaws in the award of WOSB and EDWOSB sole source contracts, “there was no assurance that these contracts were awarded to firms that were eligible to receive sole-source awards under the Program.”  And if that wasn’t enough, the SBA OIG reiterated its position that, as a legal matter, it is improper to award any WOSB or EDWOSB sole source contract to a self-certified company.

The SBA OIG studied 56 WOSB and EDWOSB sole source contracts awarded between January 1, 2016 and April 30, 2017.  This pool “represented 81 percent of the Program’s contracts awarded on a sole-source basis for this time period.”

The results were startling: SBA OIG determined that “Federal agencies’ contracting officers and firms did not comply with Federal regulations for 50 of the 56 Program sole-source contracts, valued at $52.2 million.”  As a result, there was no assurance that these contracts were awarded to eligible WOSBs and EDWOSBs.

Keep reading this article at: http://smallgovcon.com/women-owned-small-business-program/sba-inspector-general-89-of-wosb-sole-source-contracts-were-improper/

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OMB wants to strengthen a learning culture in government

Amazon, Apple and Google are examples of Fortune 500 companies that are known as learning organizations. They relentlessly pursue knowledge creation and transfer, leading to improvements in products and practices. By actively managing their institutional learning, they serve their customers’ needs — and their bottom lines.

In government, on the other hand, deliberative strategic planning around learning happens far too rarely. Even though the 1993 Government Performance and Results Act requires agencies to develop strategic plans, its implementation has never met the original expectations. There are good reasons why learning approaches differ between the public and private sectors, but every organization can learn and apply that knowledge to improve results.

A few federal agencies are showing that it can be done. The Labor Department, for example, requires its operating agencies to develop learning agendas that identify high-priority research studies that those agencies would like to have done. The U.S. Agency for International Development launched a learning office with agencywide policies that encourage grantees to develop learning plans. And in just the last two years, the Small Business Administration has made notable progress, launching an evaluation office and creating an agency-wide learning agenda.

Keep reading this article at: https://www.govexec.com/excellence/promising-practices/2018/05/omb-wants-strengthen-learning-culture-government/148350/

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GAO clarifies competition standards for simplified acquisitions

A recent GAO decision has shed light on the question of what an agency must do to adequately promote competition during a simplified acquisition.

There is still no bright line for determining which agency actions meet this threshold.  However, the recent decision in Bluehorse Corp., B-415641 et al. (Feb. 6, 2018), established that merely inquiring about a solicitation, without taking further action as recommended by the procuring agency, is not enough to force an agency to include a company in a limited competition.

To promote contracting efficiency, the FAR allows for special simplified acquisition procedures to be applied to certain procurements that do not exceed the regulatory threshold. An agency is not required to use the ordinary full and open competition standards to conduct these simplified acquisition procurements. However, what exactly is required of a federal agency under a simplified acquisition procedure has yet to be clearly defined by the applicable provisions of the FAR and the relevant GAO case law. The FAR requires the agency to “promote competition to the maximum extent practicable” and establishes that this standard can generally be met through the solicitation of at least three sources. See FAR § 13.104.

Keep reading this article at: http://smallgovcon.com/gaobidprotests/gao-clarifies-competition-standards-for-simplified-acquisitions/

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