SBA: Short for "Stopping Bad Apples?”
Just ask EG Systems
and Multimax Array who after being suspended by SBA at the start of FY2011, were
recently dropped from the $3 billion First Source contract by DHS because of
The award for a federal agency completely reversing its
image in the area of enforcement goes to…
You have to admit, when we all woke up in the new fiscal
year and realized SBA had suspended GTSI from government contracting, it was impressive.
Even though the eventual punishment was much lighter than deserved, the "statement”
echoed throughout the industry.
That statement was recently reiterated by DHS’ decision not
to renew the First Source contracts for EG Systems and Multimax Array who were
implicated for doing business on a pass-through basis with GTSI. This was no
mere drop in the bucket since First Source accounted for more than $270 million
in awards for the two companies since 2007. On a related note, EG Systems is a
subsidiary of Eyak Technology, an Alaska Native Corporation (ANC) based in
Northern Virginia that was previously owned in part by GTSI.
Which brings us to the state of affairs with the ANC’s.
This situation coupled with intense scrutiny from Capitol
Hill about ANC activities in the SBA
8(a) Business Development Program, has prompted SBA to work with ANC’s and
other tribal organizations to ensure the benefits they are afforded actually
benefit those intended to receive them, and not large companies trying to
exploit the program.
There is considerable chatter throughout the community that
SBA is just getting started, and rightly so since there are plenty of "in your
face” examples of companies exploiting the system in the 8(a), SDVOSB, HUBZone
and other programs. Too many instances of outright affiliation or exceeding the
size standards of the primary NAICS Code have been able to slide by for various
reasons. One can only imagine the steps SBA is taking to mitigate similar
issues in the brand new Women’s Set-Aside Program launched earlier this month.
These enforcement actions are necessary, applauded, and essential
to the viability of the small business assistance programs. The government
sector is littered with the chalk outlines of small companies who tried to do
business "by the rules” only to be mowed down by circumstance and opportunists
in the form of small, medium and large companies with intentions not in the
best interest of government agencies, their workers or America’s small
businesses. The activities of more than just a few bad apples serve only to
create additional burdens on legitimate small companies.
SBA has their work cut out for them and we wish them speedy success!