For the past 50 years, Congress has passed a National Defense Authorization Act which is designed for budgeting purposes as well as various other provisions that impact a variety of concerns held by the federal government. The 2017 National Defense Authorization Act was signed into law in December 2016 and contains several notable changes to how the United States Department of Veteran Affairs program for veteran-owned small businesses and service-disabled veteran owned small businesses. To fully understand and respond to these changes, it might be important to consult with an experienced attorney who specializes in helping veterans
A man was recently convicted of four counts of wire fraud and sentenced to 30 months in prison and a $1 million fine in connection with a scheme of recruiting service-disabled veterans as owners of a construction company to receive specific government contracts. The man was also sentenced to one year of supervised release by the court. There are certain steps that service-disabled veteran should take to avoid being deceived by individuals, because unfortunately government contracts in a variety of industries have been known to engage in fraudulent activity. Some of the most common types of fraud include federal acquisition regulation fraud and government procurement fraud. Individuals including veterans who are aware of third parties performing activity to defraud the government may even be eligible to file whistleblower claims. In the case that an individual becomes aware of fraudulent activity, it is also often a wise idea to retain the assistance of a knowledgeable attorney.
Are Agencies Responsible for Their Negligent Estimates?
Recently, the U.S. Court of Appeals ruled in favor of Agility Defense and Government Services, Inc.'s claim under the Negligent Estimates Theory in government contracting. In Agility Defense & Government Services, Inc v. U.S., a contractor, Agility Defense, bid on and won a contract to dispose of surplus military property for the Defense Reutilization and Marketing Service (DRMS), a department within DLA (Defense Logistics Agency). Historically, the DRMS had run their own reutilization, demilitarization, and reduction to scrap process, but began contracting the process in 2007. Agility and two other contractors were awarded contracts of which Agility was awarded a contract to operate six facilities. As part of the contract, awardees could sell any scrap they salvaged, without reservation, to offset costs. As part of the solicitation and in response to requests for workload history and projections, DRMS provided a website link to historical data.
Open for Comment
On February 21, 2017, the VA issued a CVE rule change proposing that Center for Veterans Enterprise (CVE) verified businesses be reverified for compliance every three-years instead of every two-years.
The VA’s proposal implements a section of the Veterans Benefits, HealthCare, and Information Technology Act of 2006, that requires the VA to verify ownership and control of veteran owned small businesses (VOSB), including service-disabled veteran owned small businesses (SDVOSB) so these firms can participate inVA acquisitions set-aside for SDVOSB/VOSBs.
Property Transfers to Family and Tax Consequences
Property transfers to family members can have tax consequences. Business owners should have estate plans, but many owners are unaware of the tax implications associated with recapitalizing their business entities to help family members. Business owners probably already know that sales of stock, for example, have tax consequences. Selling stock for an amount for more than was paid for it (“in excess of basis”), results in a taxable gain. However, they may not realize that there are other transfers of property that also result in taxable transactions.
- Implementation of the Veterans First Contracting Program as a Result of the U.S. Supreme Court Decision
As you may recall, we sent out a newsletter a couple of months ago detailing some of the implications of the Supreme Court's decision in Kingdomware Technologies v. U.S. On July 25, 2016, the VA issued a new procurement policy memorandum titled "Implementation of the Veterans First Contracting Program as a Result of the U.S. Supreme Court Decision." This newly minted policy has far reaching implications.
What Should I Do If Faced with a Clearly Unreasonable Contracting Officer?
Federal contracting officers have broad discretion – within the limitations and allowances of the FAR. But, contracting officers must respond in writing to claims filed by contractors. If they do not, they are violating the FAR and contractors are eligible for attorney's fees and other costs and penalties. A recent federal appellate court decision reveals that egregious breaches by unreasonable contracting officers renders the FAR immaterial and courts will rely on the common law of contracts to make contractors whole.