Comment by rdtsc | Hacker News Reader

Comment by rdtsc | Hacker News Reader

> ... abusing programs intended for small businesses owned by “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals;”

Yap, saw that while bidding on projects. So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.

Some schemes were running for 20 some years. For instance case 30 running since 1999, awarded $52M.

In case 18, they received over $200M. That's a lot of money wasted.

But good thing they were caught, surely they will receive harsh sentences?

> POGO determined is likely a recent case involving a Kansas City, Missouri-area construction company owner who was sentenced to 18 months in prison.

No, not really. Just 1.5 years after stealing $13.7 million.

There are more instances that are shady but harder to track, such as the government entity writing the specs to match exactly one company's product. Let's just say by a company owned by their college buddy. So on paper they may be lots of bids, but surprise, only this one company ends up matching up.

So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.

They don't even have to go to that much trouble. There's a whole ecosystem of 8(a) companies set up to take advantage of these contracts and then subcontract the work out to ineligible companies. They usually walk the halls to find the contract, handle some paperwork, provide the corporate history/legitimacy and take a bit off the top. And what you get is some tiny shop winning multi-million dollar contracts allocated for disadvantaged businesses, then turning around and farming out the work to Northrup-Grumman or SAIC or some other tradition, giant defense/government contractor (whom they usually have already worked out arrangements).

This is annoying but ultimately a small cost to work around bad legislation. The fix is to stop this sort off I'll thought out micro-managing and social engineering. There are better ways to make women and minorities more wealthy and powerful.

I spent a few years as a DoD contractor, and both companies I worked for were the bigger company on the contract, but the lead contractor what some small company that fit a specific category. I'll admit that I considered starting my own company,being a compensated disabled veteran, to get in the same action, but it didn't seem right and I wanted to get away from government contracting anyway.

Can confirm the same. There was always some one-person “company” who was the prime contractor simply because he was a disabled-Alaskan-native-owned-small-business, who did nothing but skim a little $$ and pass all communications back and forth between the government and the actual contractors who were doing all the work. Nice work if you can get it!

"work" ha

The 8(a) company, or similarly situated subcontractors, have to get at least 50% of the $, more than a bit off of the top. You can't sub more than half of the work to large businesses.

http://smallgovcon.com/statutes-and-regulations/limitations-...

Yeah, it is insane. I know someone who works for the state of Virginia. All purchases must be through one of these small businesses. But a lot of them are just a single person with a laptop who just goes online to the actual vendor and orders it and adds a considerable markup. The state organization is not allowed to buy from the vendor directly. I'm not opposed to jobs programs but ostensibly we can find some that actually provide value.

Ahh the million dollar hammer theory.

Ah but if you propose legislation to change the acquisition process then you're taking economic opportunity away from veteran/disability/minority/[disadvantaged group part of x party's coalition] and therefore are evil.

Yep, a lot of shell companies as well basically 'owned' by their parent company.

I think about NYS and Guy Brown, which is a certified MWBE/WOSB but just orders from Staples with added markup. They'll win procurement contracts because of the MWBE/WOSB scoring alone.

have been in the contractor side of this, and have had a couple of contracts written with me in mind, but... one had a twist.

Used to do tech training. Had a syllabus up on our website - "onsite training with topics X, Y and Z". A school put out an RFQ on this, and essentially used our syllabus (basically word for word). We'd talked on the phone - they wanted us to come there and do the training (relatively niche at the time).

Someone else submitted a bid using our syllabus and "won" - they were local, and so didn't have to include travel costs, and were 'cheaper'. They didn't have our material, but... were the "lowest bidder" so had to be chosen.

I've also had a couple projects 'single sourced' to me via govt purchasing process, and it always raises some eyebrows, but I'm generally the only contractor who would be qualified (because... I wrote the system years ago, it's very niche, not much budget, old tech, and no political will to pay to move it to something modern).

This is why the low and high bid are automatically thrown out, and then the remaining bidders are investigated for ability to actually deliver. For real world contracts change orders are where the real money is - that is places where your specification is wrong for some reason not known in advance and you will need to pay for the fix. The low bidders are experts in figuring out how meet the letter of the specs while building something that doesn't make sense (By spec the toilet drains pipes won't connect to the toilet, we can fix that for only $$$). A more reasonable contractor will see that and make the obvious fixes while for no extra charge, but not the low bidder - this makes the low bidder more expensive.

CFR -> change order -> $$$

That last one is a bit harder these days, as assesment and requirements are usually done by a team and not an individual.

Arctic Slope Regional Corp Board of Directors - https://www.asrc.com/leadership/

ASRC Federal Subsidiary Leadership - https://www.asrcfederal.com/about

ASRC is a fun case. The Alaska Native corporations were set up in the 70s to settle land claim lawsuits and to provide Alaska Natives a way to a better economic future.

From what I understand, the federal government sets aside contracts for small businesses owned by certain disadvantaged classes (disabled veterans, women, Alaska Natives, etc). But apparently ASRC is able to continually spin off wholly-owned subsidiaries that are considered Alaska Native-owned small businesses, even if the overall ASRC is too big to qualify for those set-aside contracts.

Today ASRC is the most successful of the Alaska Native corporations, but along the way has basically become an evil oil company mixed with an evil government contracting company. But hey, they give each of their Inupiat shareholders a multi-thousand dollar dividend every year, so they seem to be a necessary evil.

Notably, ASRC just quit the Alaska Federation of Natives, basically because the AFN acknowledges a climate emergency but ASRC just wants to keep drilling for more oil.

I've also noticed ASRC contains a fair amount of what might be seen as nepotism elsewhere. The CEO's family and the chairman's family are certainly well represented in the company's ranks. But on the other hand there aren't a whole lot of employers in the North Slope so maybe that's just to be expected.

I'm sure the 'ASRC Federal' holding company acts as a nice firewall between ASRC proper and the Federal subsidiaries actually getting the government contracts. It's probably just about impossible for the board to keep tabs on what's going on (esp from Barrow).

I did some work for them about 10 years ago and the setup seemed pretty gross at the time (although the people i actually worked with were great).

Yeah, the whole concept of a modern corporation that restricts ownership to members of a certain ethnic background feels backward in this day and age. Yes, I know the actual requirement to be a shareholder is tribal membership and as Elizabeth Warren will tell you, tribal membership is not equivalent to ethnicity ... but it's a pretty close proxy here.

Apparently when the Alaska Native Corporations were set up, folks were aware of what a terrible failure the Indian Reservation system had been in the lower 48 and knew they had to do something different. And as far as I can tell, Alaska Natives have a much higher opinion of their native corporations than American Indians do of their reservations. So I dunno ... it's a gross corporation, like many others around the world, but it's a gross corporation that belongs to, and works on behalf of a population that could easily just be victims of said corporations. At least they've got one deep-pocketed organization in their corner.

Mixed feelings about the board too. I wonder how many other multi-billion dollar companies have a board member without a college degree? ASRC has several! On the other hand, 4 board members are female and there are a wide range of ages too, so their democratic board selection might yield a good diversity of experience and outlook.

Reply on news.ycombinator.com