SBA lifts suspension of technology contractor

The Small Business Administration has reached an agreement with recently suspended technology contractor GTSI Corp. that will allow the systems integrator to resume most of its business with the federal government during an ongoing investigation, subject to strict oversight.

According to the pact announced Tuesday, GTSI will once again be eligible to compete for non-small business contracts. The Herndon, Va., company will remain temporarily barred from SBA's mentor-protege program, joint ventures with small firms and circumstances where it serves as a subcontractor to a small business.

The agreement lifts SBA's Oct. 1 temporary suspension of GTSI amid allegations the company manipulated small business set-aside rules to inappropriately win government work. The deal is contingent on GTSI's cooperation with the SBA inspector general's ongoing investigation of those allegations, and will remain in effect for a maximum of three years. It will end earlier if the IG completes the probe sooner, or if SBA proposes debarring GTSI.

The company also must adhere to several oversight requirements. For example, an independent, SBA-approved monitor will track GTSI's business practices and ensure it is fulfilling the requirements of the agreement. GTSI also must institute SBA-approved ethics and contracting rules training.

"The lifting of the suspension gives GTSI, its vendors and clients the ability to move forward," John Toups, chairman of the contractor's board of directors, said in a statement. "The cloud of uncertainty that was hanging over our employees, creditors, shareholders and partners has been removed, and we can get back to the business of serving our government clients."

Toups noted the company -- which has about 525 employees and ranked 106 on Government Executive's list of top 200 contractors for fiscal 2009, with nearly $540 million in prime contract awards -- in recent years has earned less than 15 percent of its annual revenue from working with small businesses serving as prime contractors.

The agreement with the government did take a toll on the contractor's leadership team. It required GTSI's chief executive officer and general counsel to step down; several other high-ranking company officials will be suspended while the pact is in effect.