The second of at least two co-conspirators has been sentenced for participating in a alleged contracting scheme that created the illusion of competition.
Anthony R. Bilby, 40, of Leesburg, Va., was sentenced this week to 16 months in prison and two years of supervised probation. He pleaded guilty in December to conspiracy to commit wire fraud, and what the Justice Department described as “major government fraud.”
As part of his plea, Bilby agreed to forfeit nearly $1.1 million -- his alleged proceeds from the conspiracy.
Statement of Facts for Anthony Bilby
Statement of Facts for Thomas Flynn
A second man, Thomas S. Flynn, pleaded guilty in October, and has been sentenced to three months. According to court records, Flynn received at least $80,900 as part of the plot.
Neither the Justice Department nor court records are naming the companies Bilby and Flynn worked for, but it is obvious from reading the statement of facts that was released as part of their guilty pleas that others at the companies and from inside the government were involved.
A spokeswoman for the U.S. Attorney’s Office for the Eastern District of Virginia said no one else has been indicted and declined to comment on whether the investigation is continuing.
However, in a statement released when Bilby pleaded guilty, the Justice Department said he agreed to cooperate with investigators as part of his plea agreement.
The companies involved are described as IT resellers and also are certified as service-disabled, veteran-owned companies.
At least three companies had people involved in the scheme. Bilby is described as an outside sales rep working at least one of the companies.
People inside the government also were involved and provided Bilby with internal government documents, according to the statement of facts.
The way the scheme worked is that Bilby or Flynn or unnamed others would submit bids from multiple companies, but only one bid from one company was designed to be considered a winning bid. The other bids were purposely higher so they were guaranteed to lose.
The government was to get the impression that a competition was taking place.
The co-conspirators shared company logos and templates from their companies so that a single person would be preparing the bids from all the companies.
They also took turns on which companies would play the role of the winning bidder and which would be tapped as the losing bidders.
The co-conspirators would then share a 10 percent cut off of the profit gained under the winning contract.
The conspiracy took place over a five-year period.
Agencies with contracts targeted in the scheme include the Environmental Protection Agency, Homeland Security Department, the General Services Administration and the Agriculture Department.
According to the statement of facts, the largest contract was with DHS for a wide-area network optimization that was worth $24.1 million. The losing bids came in at $26.7 million and $29.1 million.
I can only say, Wow. I’ll be doing my best to follow this case because it is hard to imagine that others won’t be charged.
I’ve also put in a request for an interview with the U.S. attorney involved the case.
Let me know if you hear anything.
Posted on Feb 21, 2014 at 1:44 PM2 comments
As I read the statement yesterday from the Office of Personnel Management about why they canceled a $5 billion training contract, something about it just didn’t sound right.
I don’t doubt their reason that policy changes and budget issues created the need to rework the contract requirements, but the explanation is still pretty vague.
There is a distinct lack of communication with the bidders who spent their resources chasing the contract only to have it cancelled during the source selection process.
OPM only put out a one- sentence notice saying the contract was canceled, and the statement they gave us came only after we asked because we were writing a story about it.
As far as I know, they have given no more of an explanation to the Professional Services Council, which sent a letter to OPM Director Katherine Archuleta asking for more information. It was PSC’s letter and statement that put us on the story to start with.
I think everyone understands that contracts can get canceled, but don’t the bidders deserve more?
OPM still has a need for the training and human resources services, and they’ll continue to use contractors to meet those needs, so wouldn’t a fuller explanation to industry help them prepare better solutions and better bids that can more fully address OPM’s reworked requirements?
OPM obviously doesn’t understand nor appreciate the critical business decisions companies make when picking what contracts to bid on, and which ones to take a pass on.
Information is vital to companies as they assess and manage risk and decide where to invest limited resources.
OPM, and frankly, a lot of the government agencies, just don’t get it.
They don’t understand that if you give good, complete information, your supplier base is better prepared, has a greater understanding of your needs and can bring better solutions to bear. The government, the contractors and the taxpayer alike will all benefit.
I also wonder if OPM is trying to hide some basic flaws in the contract that might have nothing to do with requirements.
It is interesting to me that, as this contract wound its way through the process, 11 companies filed pre-award protests with the Government Accountability Office because OPM had excluded them from the competitive range.
With each protest, OPM backtracked and allowed those companies back into the competition, only to later derail that competition by canceling the contract.
It makes me wonder if OPM realized that it couldn’t defend its decision to exclude those contractors.
Something is amiss with this contract; we just don’t know what, and OPM isn’t talking.
One company filed another protest asking that the cost of its protest be reimbursed by OPM and GAO agreed. I’ll get those details as soon as GAO releases that decision.
So, for those two reasons – a lack of an explanation for the cancelation, and the troubles with its competitive range decisions – I’m calling BS on OPM until they come forward with more details on why it nixed a $5 billion contract.
Posted on Feb 20, 2014 at 1:26 PM0 comments
As the dust around the budget and debt ceiling settles, and as there is finally more clarity in the market, I’m hearing more people talk about 2014 as the year where winners and losers will begin to emerge.
The issues of 2013 were hard on everyone, but they did provide some cover for poor performance and misguided strategies. But that cover is gone in 2014.
While I can’t predict specific winners and losers, I’ll give you my take on the characteristics I see as being critical for success in the current market.
This might be the most profound shift we’ve seen in the market in the last couple years, and it is one that is going to accelerate going forward. One of the things I’m thinking about is cloud computing and the delivery of everything as a service.
Here, the customer isn’t buying technology per se, nor are they buying hourly IT support; instead, the technology and the services are tightly wrapped together, and the customer is paying for a service.
This has an impact on how you sell, how you reward people, how you structure deals and even how you structure partnerships.
I also include in the category of “technology-enhanced services” the strategy of adding some sort of intellectual property or proprietary process to services offering. A lot of people call it products, but it’s not the shrink-wrapped kind, but rather very specialized hardware or software. This is particularly big in the intelligence market where the need to do things such as data analytics and signals intelligence is so great.
I struggle sometimes to understand this factor completely, but many people have told me that having intellectual property that enhances your services offering is a great way of driving higher margins.
This is particularly true in the pure services business. Size will matter because companies need economies of scale to deliver the kind of profits they need to be a growing, viable company.
The prevailing wisdom is that corporate costs are relatively fixed. The costs to operate a $300 million company aren’t significantly lower than the cost of running a $2 billion company. So, the bigger the base in which you can spread those costs, the leaner you can be.
One result here is that it exerts even more pressure on the middle-market companies that don’t have the protections of small business programs and struggle to compete on price with larger companies.
Agility in this case is both the capital “A” Agile in the terms of the software development process and the lower case “a” agile for flexibility and responsiveness.
Agile development continues to gain ground as a formal process for building complex systems, but also as a mindset that encourages collaboration, continuous improvement, goal setting and measurable results.
Even if you don’t do Agile development, you’ll still be very well-served by embracing that mindset. You can’t be flexible and responsive without it.
This is a critical component of being agile; employees in the field need to have the authority to make decisions and respond to customers. Layers of bureaucracy will be the death knell of companies who can’t seem to get out of their own way.
While I’m a big fan of employee-ownership, I know it doesn’t work for every company, but what can work is giving a sense of ownership to employees. And that sense of ownership comes from their ability to make decisions.
I hear nearly every executive I talk to say how their people are their greatest asset, so unlocking that asset is crucial in today’s market and can have an impact on operations, business development, hiring and retention, and overall performance.
The signs of this are all over the market as we see divestitures have common place. Avaya is selling off its professional services business to Camber. Computer Sciences Corp. has gone through several transactions to shed non-core pieces of business.
We’ve seen the spin-offs from L-3, ITT and of course, Science Applications International Corp.
Even the largest companies don’t market themselves as generalists. No one is a one-stop shop.
If you can’t identify the handful of things you are an expert in, then you are likely lost already.
While the budget environment might be clearer than it was a year ago, budgets are still tight. Cost and efficiency are still the top priorities for agencies, and you can’t deliver that to customers unless you understand their mission, their challenges and their goals.
And it isn’t enough to just react quickly when they tell you what their pain points are. Ideally, you should be so close to your customer that you can tell them what their pain points are. You should be coming to them with creative solutions to solve their problems before a request for information or solicitation comes out.
Looping back to an earlier characteristic – Empowered employees are the best way to build that intimacy.
Not all of these characteristics apply to all companies, and I’m sure I’m missing several, so let me know what you think, and what other characteristics are critical to success in today’s market.
Posted on Feb 19, 2014 at 11:35 AM0 comments