Tag Archives: pass-throughs

SmallGovCon Week In Review: January 23-27, 2017

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It has been a busy week across the country as we get close to wrapping up the first month of 2017. Here in Lawrence, we’re gearing up for Saturday’s blue blood match-up between Kansas and Kentucky. Both teams are coming off losses and Kentucky is looking to avenge its loss to KU last year. It should be a great game.

Before we get to Saturday basketball, it’s time for our weekly Friday look at government contracting news. In this week’s SmallGovCon Week In Review, articles about what contractors can expect from the new Secretary of the Army and SBA Administrator, the number of new government contractors dropped sharply in 2016, the Washington Post wonders whether President Obama’s executive orders pertaining to contractor employees are on the new Administration’ s”chopping block,” and much more.

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SDVOSB Fraud: “Pass-Through” Voided Contract, Says CBCA

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An SDVOSB set-aside contract was void–and unenforceable against the government–because the prime contractor had entered into an illegal “pass-through” arrangement with a non-SDVOSB subcontractor.

In a recent decision, the Civilian Board of Contract Appeals held that a SDVOSB set-aside contract obtained by misrepresenting the concern’s SDVOSB status was invalid from its inception; therefore, the prime contractor had no recourse against the government when the contract was later terminated for default.

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DBE Fraud: $5 Million Settlement In Pass-Through Case

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A large business has agreed to pay nearly $5 million to resolve False Claims Act allegations that it participated in a “pass-through” scheme designed to take advantage of the Department of Transportation’s Disadvantaged Business Entity program.

According to a Department of Justice press release, HD Supply Waterworks conspired with subcontractors to list a now-defunct Native American-owned company as a subcontractor, when in fact the subcontractor’s work was passed through to Waterworks.

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SDVOSB Fraud: Large Business Pays $1.1 Million

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A large business has agreed to pay $1.1 million to resolve allegations that it created a “front company” to be awarded a SDVOSB set-aside contract–and then served as a “pass through” by performing the work itself.

In addition to the $1.1 million penalty agreed to by the large contractor, the putative SDVOSB has agreed to pay the government $50,000, plus five annual contingency payments equal to one percent of its total annual revenues.

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8(a) Fraud: Guilty Plea In Pass-Through Case

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A California man faces up to 20 years in prison after pleading guilty to 8(a) fraud charges.

According to a Department of Justice press release, Wesley Burnett admitted that his non-8(a) companies performed all of the work required under various 8(a) set-aside contracts.  And if the pass-through scheme wasn’t enough, Burnett also admitted to falsely self-certifying his companies as SDVOSBs and SDBs, resulting in additional unjustified contract awards.

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SDVOSB Fraud: Guilty Plea In “Rent-A-Vet” Case

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A Nebraska man has pleaded guilty to fraud and money laundering charges stemming from a SDVOSB “rent-a-vet” scheme under which an ineligible business received 45 SDVOSB contracts.

According to a Department of Justice press release, the man faces up to 24 months in prison and financial penalties.  He and his companies also have been suspended from government contracting and face the likelihood of debarment.

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DOT DBE Fraud: Government Announces Two Large Settlements

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If you are planning to defraud the U.S. Government (and I certainly hope that you are not), your best bet is to avoid the U.S. Department of Transportation’s Disadvantaged Business Entity program.

Yesterday, the Department of Justice announced that a DOT DBE subcontractor had agreed to settle “pass-through” fraud claims for $936,000.  The DOJ’s announcement comes on the heels of a June 6 press release touting a settlement of nearly $3 million, also stemming from alleged DOT DBE fraud.

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