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A case study of the government’s struggle to police procurement fraud

On January 5, the Pentagon’s Defense Logistics Agency (DLA) awarded a contract worth up to $33 billion over 10 years to a privately held equipment supplier called Atlantic Diving Supply, Inc., or ADS.

Only small businesses were legally permitted to bid on the contract, and ADS has been accused of defrauding the Pentagon by falsely claiming to be a small business. According to the most recent official tally of top government contractors, ADS is ranked as the 24th largest federal contractor in fiscal year 2019 with more than $3 billion in sales and ADS is the only “small business” among the top 50 that year.

ADS’s gargantuan new award for work on a Pentagon logistics program landed after the company’s majority owner, Luke M. Hillier, personally agreed to pay $20 million in 2019 to settle civil charges that his company defrauded the same program by falsely claiming to be a small business, among other accusations. An ADS spokesperson told the Project On Government Oversight (POGO) that Hillier is “unavailable for comment” and emails to him went unanswered.

In the months before Hillier’s settlement, three non-ADS executives including a former state politician pleaded guilty in a felony scheme. According to the Justice Department, Hillier  — referred to as “Person Y” in court records — allegedly created the scheme to allow ADS to benefit from contracts set aside by law for small businesses owned by socially and economically disadvantaged individuals, often women- and minority-owned ventures. Companies controlled by those non-ADS executives then allegedly would partner with ADS to perform work on the contracts.  The arrangement allegedly allowed ADS to benefit even though ADS is mostly owned by Hillier and thus was not eligible to bid on the contracts directly.

Keep reading this article at: https://www.pogo.org/investigation/2021/02/how-a-small-business-kingpin-wins-billions-in-defense-contracts/

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Agencies exceed SBA’s women-owned small business contracting goal after years of falling short

Small businesses have a big stake in the federal marketplace, and the Small Business Administration sets a high bar for the rest of the federal government to do business with them.
Click on image above to see complete Small Business Scorecard.

Agencies met many of those standards last year, according to SBA’s annual Small Business Procurement Scorecard, awarding nearly $133 billion in small-business prime contracts and exceeding SBA’s goal to have 5% of prime contracts go to women-owned small businesses.

This marks only the second year that agencies met or exceeded the women-owned small business contracting goal since SBA set that benchmark, although agencies have fallen just shy of the governmentwide goal in recent years.

Eight agencies earned an ‘A+’ on the scorecard and 14 agencies received an ‘A.’ Agencies that showed the most improvement include the Office of Personnel Management and the Department of Veterans Affairs — which both went from a ‘B’ to an ‘A.’

Keep reading this article at: https://federalnewsnetwork.com/contracting/2020/08/agencies-exceed-women-owned-small-business-contracting-goal-years-after-falling-short/

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SBA looks to tighten up certification process for women-owned small businesses

Women-owned small businesses, take note: the Small Business Administration is changing the certification process for doing business with the federal government.

Following a 2015 mandate from Congress, SBA will end its self-certification process for women-owned small businesses on October 15.  This comes after the agency’s inspector general found contract awards were going to vendors that didn’t meet the criteria for the program.

Business owners since last Wednesday have been able to submit their applications through the online platform, but SBA will only begin issuing decisions on those submitted applications on Oct. 15, the last day of the self-certification process.

Alisa Sheard, a program manager in SBA Women’s Contracting Office, said businesses already certified through the WOSB program must also go through the new certification process, requiring business owners to copy information found on their SAM.gov profile and transfer it to SBA’s online certification platform.

“Everyone will still need to submit answers to questions and upload documents because there’s no data migration. Those documents that were in the different system are not in this beta certified system, so they will have to upload all of those documents,” Sheard said in an interview.

Keep reading this article at: https://federalnewsnetwork.com/contracting/2020/07/sba-looks-to-tighten-up-certification-process-for-women-owned-small-businesses/

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New York-based company was caught allegedly selling Chinese-made hardware to the DoD

Aventura Technologies, based out of Long Island, New York, was just busted by the government after allegedly having fraudulently sold security gear to the U.S. military for years, racking up millions in federal contract money.

According to Aventura’s website, which as of November 12 is still up and running, the company claimed to be a “true single-source manufacturer providing end-to-end hardware and software solutions.”

Some of these hardware solutions included ground-based radar, turnstiles, and closed-circuit television systems, all of which the company claimed were manufactured in America. Between 2007 and 2018, Aventura reportedly supplied various branches of the U.S. military with over $20 million dollars of said equipment.

From November 2010 to the present day, it’s estimated that Aventura pulled in over $88 million in sales to both the government and the private sector.

The sting that eventually brought down Aventura was a few years in the making, including an anonymous tip in 2017, and the discovery of Chinese lettering on a body camera by Air Force personnel the following year.

Keep reading this article at: https://www.militarytimes.com/off-duty/gearscout/irons/2019/11/14/this-new-york-based-company-was-just-caught-allegedly-selling-chinese-made-hardware-to-the-dod/

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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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