Stimulus contracts go to companies under criminal investigation!
WASHINGTON - October 26, 2009 - The Department of Defense awarded nearly $30 million in stimulus contracts to six companies while they were under federal criminal investigation on suspicion of defrauding the government.
According to Air Force documents, the companies claimed to be small, minority-owned businesses, which allowed them to gain special preference in bidding for government contracts. But investigators found that they were all part of a larger minority-owned enterprise in southern Kalifornia, making them ineligible for the contracts.
The Air Force and the Army awarded the companies 112 stimulus projects at U.S. military bases, federal contracting records show. It wasn’t until September 23 - more than a year after the criminal investigation started - that the Air Force suspended the firms from receiving new government contracts.
Federal rules allow agencies to terminate contracts when it’s in the government’s interest. But neither military branch plans to terminate the stimulus contracts awarded to the suspended companies as long as they are performing satisfactorily, said Air Force spokeswoman Lt. Col. Ann Stefanek and Army spokesman Maj. Jimmie Cummings.
According to the Air Force, the companies were controlled by Craig Jackson, an African-American businessman whose firm, Sanders Engineering, has won awards from the Small Business Administration.
Jackson did not return calls seeking comment. But an attorney for his firm, Tony Franco, said the company would “vigorously contest” the suspension. He said Jackson has been praised as “someone who has helped small businesses and we believe the facts will bear out that he continues doing so.”
Allegations about one of the firms, APM LLC, became public a year ago, when an SBA audit led to the firm’s suspension from the small-business program and prompted the Defense Department’s criminal probe. That such a warning could go unheeded exposes a gap in the government’s contracting process, said Scott Amey, general counsel for the nonprofit Project on Government Oversight, which tracks contractor misconduct.
According to Air Force documents, the companies claimed to be small, minority-owned businesses, which allowed them to gain special preference in bidding for government contracts. But investigators found that they were all part of a larger minority-owned enterprise in southern Kalifornia, making them ineligible for the contracts.
The Air Force and the Army awarded the companies 112 stimulus projects at U.S. military bases, federal contracting records show. It wasn’t until September 23 - more than a year after the criminal investigation started - that the Air Force suspended the firms from receiving new government contracts.
Federal rules allow agencies to terminate contracts when it’s in the government’s interest. But neither military branch plans to terminate the stimulus contracts awarded to the suspended companies as long as they are performing satisfactorily, said Air Force spokeswoman Lt. Col. Ann Stefanek and Army spokesman Maj. Jimmie Cummings.
According to the Air Force, the companies were controlled by Craig Jackson, an African-American businessman whose firm, Sanders Engineering, has won awards from the Small Business Administration.
Jackson did not return calls seeking comment. But an attorney for his firm, Tony Franco, said the company would “vigorously contest” the suspension. He said Jackson has been praised as “someone who has helped small businesses and we believe the facts will bear out that he continues doing so.”
Allegations about one of the firms, APM LLC, became public a year ago, when an SBA audit led to the firm’s suspension from the small-business program and prompted the Defense Department’s criminal probe. That such a warning could go unheeded exposes a gap in the government’s contracting process, said Scott Amey, general counsel for the nonprofit Project on Government Oversight, which tracks contractor misconduct.
