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Major Hit For Beltway Bandit

02 Oct

This is a first for a major Government contracting company, euphemistically known in the DC area as a Beltway Bandit. This sort of underhanded dealing isn’t that uncommon. Indeed, during the Bushit Administration it was found that several of the major contractors had filed for contracts as Small Businesses and won millions of dollars of contracts illegitimately. A not that uncommon ruse is to set up “minority owned” companies as front companies, where the major contractor does all the work. This steals hundreds of millions of dollars in work from legitimate minority owned, and other small business contractors trying to get a start.

SBA Suspends Government Work For Major Contractor

This is great. I’m always happy to see government contractors held to the same letter of the law as everyone else. Actual consequences are still all too rare for them:

Federal officials on Friday suspended one of the nation’s largest government contractors from receiving new work, alleging that the Northern Virginia company inappropriately went through other firms to gain access to contracts set aside for small companies.

The U.S. Small Business Administration’s action imperils hundreds of millions of dollars in revenue for GTSI Corp., a top-50 contractor that has relied on the Pentagon and the rest of the federal government for more than 90 percent of its sales in recent years.

At issue is work GTSI did as a subcontractor for small businesses serving as the prime contractors on government contracts.

“There is evidence that GTSI’s prime contractors had little to no involvement in the performance of contracts, in direct contravention of all applicable laws and regulations regarding the award of small business contracts,” an SBA official wrote in a letter to GTSI’s chief executive, Scott W. Friedlander. “The evidence shows that GTSI was an active participant in a scheme that resulted in contracts set-aside for small businesses being awarded to ineligible contractors.”

[…] “It’s the first time in decades that the government has completely suspended a significant player, a legitimate top-tier contractor,” said Steven Schooner, a contracting law professor at George Washington University. “It puts everybody on notice.”

 
1 Comment

Posted by on October 2, 2010 in Great American Rip-Off

 

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