As summer turns to fall (and football season), government contractors are dealing with the flurry of awards, orders and modifications that always accompanies the end of the federal fiscal year. In this week’s SmallGovCon Week In Review, a HUBZone fraudster gets jail time, a Navy report reveals systemic Berry Amendment violations (by the Navy!) and much more.
I am excited to announce the re-launch of the popular SmallGovCon Week In Review series! Each Friday, SmallGovCon will provide a snapshot of some of the week’s top news and commentary from the government contracting community.
In this week’s SmallGovCon Week In Review, a False Claims Act settlement, a proposal to ban so-called “inverted” firms from receiving government contracts, Guy Timberlake weighs in on the proposed increase to the Simplified Acquisition Threshold, and much more.
A small business and its owner have agreed to pay $250,000 to resolve HUBZone fraud allegations, including a claim that the company’s HUBZone office was a “virtual” location where no employees actually worked.
According to a Department of Justice press release, Air Ideal, Inc. and its majority owner have also agreed to pay the government five percent of the company’s gross revenues over the next five years.
Last week, I joined Guy Timberlake of the American Small Business Coalition for another segment of the popular “GovConChat” podcast series.
Guy and I discussed the impact of the 2015 National Defense Authorization Act on small contractors, including provisions (or a lack thereof) involving SDVOSBs, WOSBs, and reverse auctions. Guy and I also chatted about a recent allegation of HUBZone fraud stemming from a contractor’s alleged use of a “virtual office” as its supposed HUBZone location.
It’s always a pleasure speaking to Guy, who brings a great perspective to the issues (as well as a memorable voice tailor-made for podcasts). Check out the full podcast by following this link, and be sure to check out the GovConChat archives for Guy’s conversations with other movers and shakers in federal procurement.
A HUBZone contractor has been accused of HUBZone program fraud for allegedly falsely claiming to be located in a HUBZone, when in fact the office in question was a “virtual office” where no employees worked.
According to a Department of Justice press release, the contractor not only misrepresented its principal office location, but submitted a fabricated lease to the SBA as part of its HUBZone application.
HUBZone certifications are averaging 116 days from the date of application to the date of certification, according to a fascinating SBA Office of Inspector General Report on the HUBZone certification process. The 116-day time frame is considerably longer than the SBA’s goal of 90 days. However, in a majority of cases, the SBA does complete the certification process within 90 days of receiving all of the applicant’s supporting documentation.
In addition to an overview of the time frames associated with a HUBZone certification (a question I am often asked), the SBA OIG report concludes that the SBA’s HUBZone application procedures need updating–and that three potentially ineligible firms were certified in 2012.
Two Kentucky-based government contractors and their owners have agreed to pay $6.25 million to settle HUBZone fraud claims, according to a U.S. Department of Justice press release.
The costly settlement puts an end to a saga involving DOJ claims of a vacant “principal” office, undisclosed affiliation, and fraudulent statements made to the SBA and and the U.S. Army.