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January 22, 2014 By cs

Sham charged in $1.2 million veteran business fraud

A Bergen County, N.J., woman was arrested on January 8, 2014 on charges that she fraudulently represented her company as a service-disabled veteran-owned small business in order to obtain more than $1.2 million worth of government contracts set aside for disabled veterans, U.S. Attorney Paul J. Fishman announced.

Miriam Friedman, 54, of Teaneck, N.J., surrendered to special agents from the U.S. Department of Veterans Affairs (VA), Office of the Inspector General, as a result of a federal criminal complaint charging her with wire fraud. She is scheduled to make her initial appearance before U.S. Magistrate Judge James B. Clark III in Newark federal court.

According to the unsealed complaint:

Friedman is the owner of Office Dimensions Inc., a company in Teaneck that sells furniture and design services to industrial and government customers. Friedman and her husband control Office Dimensions and all its revenues, as well as run the company’s daily operations. Neither served in the U.S. military, but Friedman’s father-in-law is a retired U.S. military veteran.

On Nov. 23, 2009, Friedman certified in a central registry for government contractors that Office Dimensions was a service-disabled veteran-owned small business. In her certification, she allegedly falsely claimed that her father-in-law was the owner and operator, even though he had very little involvement with Office Dimensions and was not service-disabled. Friedman then bid for VA contracts set aside for service-disabled veterans who own their businesses.

From January 2010 through November 2011, the VA paid Office Dimensions more than $1.2 million on fraudulently obtained contracts to which Friedman was not entitled.

The wire fraud count with which Friedman was charged is punishable by a maximum potential penalty of 20 years in prison and a fine of $250,000 or twice the gross loss or gain cause by the offense.

U.S. Attorney Fishman credited special agents of the U.S. Department of Veterans Affairs, Office of the Inspector General, under the direction of Special Agent in Charge Jeffrey G. Hughes; the U.S. General Services Administration, Office of the Inspector General, under the direction of Special Agent in Charge James E. Adams; and IRS – Criminal Investigation, under the direction of Special Agent in Charge Shantelle P. Kitchen, for the investigation leading to today’s arrest.

The government is represented by Assistant U.S. Attorney Scott B. McBride of the U.S. Attorney’s Office’s Health Care and Government Fraud Unit in Newark.

The charges and allegations contained in the complaint are merely accusations and the defendant is considered innocent unless and until proven guilty.

See District of New Jersey U.S. Attorney Office’s press release at: http://www.justice.gov/usao/nj/Press/files/Friedman,%20Miriam%20Arrest%20News%20Release.html

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

November 18, 2011 By cs

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

November 15, 2011 By cs

Small-biz set-asides may harm firms, expert says

There may already be too many set-aside categories for small businesses, according to at least one expert. The sheer number of categories, and the targets set for agencies to award certain numbers of contracts to each, has the unintended consequence of squeezing some small businesses out of the game, he said.

The plethora of small business programs “has disenfranchised many of those who are not eligible to the extent that they no longer back the very programs they once were glad to support,” Scott Bellows, a program manager at the South Carolina Procurement Technical Assistance Center in Columbia, S.C., said Nov. 7.

And yet, the government is now considering creating yet another category, for businesses that employ military veterans.

During a hearing, Bellows told the House Small Business Committee’s Contracting and Workforce Subcommittee that the small-business programs, such as those helping companies owned by service-disabled veteran and women, and the 8(a) companies, don’t do as much as most people think to help small businesses at large.

Many of the same contractors tend to get the work over and over. That makes it hard for other small companies to break into the market, he said.

To break in, business owners “soon realize that it’s a long, uphill battle,” he said.

Bellows said the government, along with the Small Business Administration’s annual small business score card, should take a different look at the awarded set-aside contracts.

“If one asks how many ‘unique’ vendor contracts were awarded during a certain period of time, you might just come away with a different impression of how these programs are promoting small business development and helping to revitalize our economy,” he said.

The score card gave the government overall a B in awarding contracts to small businesses in fiscal 2010. The government has a goal to award 23 percent of contracts to small companies. In 2010, it reached 22.7 percent. It missed many of its goals for the specific categories of small businesses.

President Barack Obama’s Interagency Task Force on Veterans Small Business Development has recommended the government should consider giving companies with at least 35 percent of its employees as veterans a special status in federal contracting. They likened the new category to the Historically Underutilized Business Zone small business program. For HUBZone status, 35 percent of a small firm’s employees must live in an economically depressed zone.

The task force said the new small-business category would not take too much regulatory efforts. The task force wants the Veterans Affairs and Defense departments, as well as SBA and the Office of Management and Budget, to further explore the idea.

The task force is interested in the hiring aspect of creating the new category.

About the Author: Matthew Weigelt is a senior writer covering acquisition and procurement at Federal Computer Week. Published Nov. 9, 2011 at http://fcw.com/articles/2011/11/09/set-aside-small-business-programs-other-small-business-effects.aspx.

August 18, 2011 By cs

General Dynamics, others join protest of VA’s $12B T4 contract

Three additional protests have been filed with congressional auditors against the Veterans Affairs Department’s $12 billion Transformation Twenty-One Total Technology procurement program.

That brings the total to 15 protests filed with the Government Accountability Office against the T4 contract, of which 11 protests have been denied, dismissed or withdrawn.

The three new protests were filed Aug. 8 by IBM Corp., General Dynamics Information Technology Inc., and Standard Communications Inc.

IBM previously had filed a protest with GAO on Aug. 2.

The Aug. 2 IBM protest and the three new protests are currently listed as “open” by GAO, within decisions due by November. The GAO attorney in charge of the four cases is Paul Jordan.

A fourth company, D&S Consultants, has filed protests because the VA excludedit from the competitive range, but GAO denied the protest. GAO said that D&S could not show that the labor rates the government estimated for the contract were unreasonable. VA said that D&S labor rates were too low to give the agency any confidence that the work could be performed.

D&S has now filed suit in the Court of Federal Claims., according to Federal News Radio.

The T4 program is considered one of the largest IT contract vehicles in government, and selected companies will work on integrating VA systems and modernizing the department’s IT infrastructure.

The VA was expected to award 15 contractors the opportunity to bid for task orders valued at up to $12 billion over five years under the program.

As of July 5, 14 of the contracts had been awarded, and the 15th was being held until resolution of a protest.

Seven of the T4 awards were to be made to veteran-owned and service-disabled veteran-owned businesses.

Under the law, federal agencies must suspend activity on a particular contract if a protest is filed against that contract within 10 days of an award, but there are exceptions that allow work to continue.

While the VA initially suspended T4 contracting activity after IBM’s Aug. 2 protest, the VA subsequently decided it had an “urgent and compelling” need to continue with the contract instead of waiting for GAO to resolve the protests, VA spokeswoman Jo Schuda wrote in an e-mail, according to an Aug. 11 article by Federal News Radio.

Schuda also said in the article that VA has been awarding noncompetitive contracts to the T4 winners, which the agency is allowed to do.

Schuda did not respond to a request for comment.

— About the Author: Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Washington Technology. Published Aug. 12, 2011 at http://washingtontechnology.com/articles/2011/08/12/more-protests-va-t4-contract.aspx?s=wtdaily_150811.

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