The Department of Defense Office of Inspector General (OIG) recently released an audit report about Service-Disabled Veteran-Owned Small Business Contract Awards at DoD . The report noted major concerns with how DoD is confirming eligibility for SDVOSB contract awards as well as monitoring subcontracting limitations.
These concerns could lead to increased monitoring and enforcement, so SDVOSB contractors should be keen to see what the report unearthed.
Fraud is an ever pressing concern in federal contracts, and the federal government goes to great lengths to minimize the risks to introduce fraud into the procurement system.
Unfortunately, a recent GAO report highlighted how complex ownership structures can be leveraged to obscure fraudulent contracting activities. Worse still, complex ownership structures are most frequently leveraged to perpetrate small business set-aside fraud.
SDVOSB fraud allegations, stemming from a “secret side agreement” between two joint venture partners, have resulted in a grand jury indictment against the companies and their owners.
According to a Department of Justice press release, an SDVOSB and non-SDVOSB executed a joint venture agreement that appeared to meet the SBA’s requirements, but later undermined the JV agreement with a secret agreement that provided that the non-SDVOSB would run the jobs–and receive 98% of the revenues.
Two Missouri men have been indicted for allegedly perpetrating an SDVOSB “rent-a-vet” scheme to fraudulently obtain 20 contracts totaling more than $13.8 million.
According to a Department of Justice press release, the veteran in question nominally served as the company’s President, but did not control the company’s strategic decisions or day-to-day management–in fact, the veteran apparently was working full-time for the DoD instead of managing the SDVOSB.
Wow! After 108 years, my Chicago Cubs are the World Series champions! I was in Minneapolis for this year’s National Veterans Small Business Engagement (which was an amazing event), and split my Game 7 viewing between the hotel bar and my room. I wish I could have been at Wrigley Field, and I wish that my grandfather (who really started the family on the whole Cubs thing) could have been alive to see it. But I am sure somewhere he is smiling along with all the other Cubs fans who couldn’t see this moment.
While my week consisted mostly of convention halls and Cubs, there was no shortage of news in the world of government contracting. In this week’s SmallGovCon Week In Review, a company was able to continue contracting with the VA even after it was indicted and convicted of fraud, a new report indicates that WOSBs are still being shut out of opportunities to earn major government contracts, a look ahead to the election and what changes may lie for federal contractors, a contractor gave a high-ranking government official free living space–and didn’t violate the ethics rules–and much more.
A North Carolina couple is heading to prison after being convicted of defrauding the SDVOSB and 8(a) Programs.
According to a Department of Justice press release, Ricky Lanier was sentenced to 48 months in federal prison and his wife, Katrina Lanier, was sentenced to 30 months for their roles in a long-running scheme to defraud two of the government’s cornerstone socioeconomic contracting programs.
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.