SBA suspends 2 firms, alleging they served as fronts
By
Nick Wakeman
The Small Business Administration has suspended EG Solutions and MultimaxArray FirstSource until they can address accusations of acting as fronts to pass small-business work to large company subcontractors.
The Small Business Administration has accused two small businesses of acting as front companies and funneling money onto a large-business subcontractor.
The accusations against EG Solutions and MultimaxArray FirstSource involve the Homeland Security Department’s FirstSource contract, which both companies hold as prime contractors. The same contract was involved in the SBA suspension of GTSI Corp.
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EG Solutions was a joint venture of GTSI and Eyak Technologies but is now a subsidiary of Eyak, SBA said. GTSI’s suspension was lifted after its CEO agreed to resign and the company took other actions.
MultimaxArray is a joint venture formed by Multimax, later acquired by Harris Corp., and Array Information Technology. A spokeswoman for MultimaxArray FirstSource said the company was disappointed with SBA's decision and "believe[s] all our actions were appropriate." The company will "cooperate with SBA to address these important issues," she added.
According to SBA documents, EG Solutions and MultimaxArray had a subcontractor perform most, if not all, of the work under the contract. That kind of activity violates federal regulations governing small-business set-aside contracts.
MultimaxArray FirstSource also is accused of improperly representing itself as a small business.
Both companies have 30 days to respond to the suspensions.
ED Solutions did not return calls for comment.