Two small businesses suspended in set-aside probe

The Small Business Administration has suspended two more firms in its expanding probe of small business contracts that might be illegally passed through to large companies.

On Thursday, SBA announced the suspension of EG Solutions and MultimaxArray FirstSource based on allegations the firms misrepresented themselves on a large Homeland Security Department information technology contract.

Both firms won multimillion-dollar task orders, reserved exclusively for small businesses, on DHS' $3 billion FirstSource contract for IT hardware, software and services. But, according to letters SBA sent to the firms on Thursday, much of the contract work actually was passed through to a larger company.

"Further evidence shows that the subcontractor in fact performed most if not all of the work required to be performed in connection with the subject contract opportunities," SBA suspension and debarment official Michael Chodos wrote. "There is also evidence that [MultimaxArray FirstSource] and its subcontractor attempted to conceal the nature of this relationship from the government and their competitors, after concerns were raised about MAF and its subcontractor's conduct."

While the letters do not mention the subcontractor by name, in October SBA suspended GTSI Corp., a systems integrator in Herndon, Va., based on allegations it was performing virtually all the work on a $165 million delivery order that was awarded to MultimaxArray. GTSI also served as a subcontractor to EG Solutions on the FirstSource contract. SBA later allowed GTSI to resume most of its government work pending the results of an investigation and subject to strict oversight criteria.

Chodos wrote there is evidence EG Solutions and MultimaxArray also "committed fraud or a criminal offense in obtaining and attempting to obtain contracts and in its performance of those contracts, and that there is adequate evidence of a lack of business integrity or business honesty."

A spokesman for MultimaxArray did not respond to a request for comment on Friday. The firm is a joint venture of Multimax and Array Information Technology.

EG Solutions, based in Dulles, Va., is a subsidiary of Eyak Corp., an Alaska native corporation. In a statement, Eyak said it takes "seriously the obligation to provide the federal government with quality contracting services in an ethical and responsible manner."

The two firms have 30 days to formally respond to the suspension.

Stay up-to-date with federal news alerts and analysis — Sign up for GovExec's email newsletters.
FROM OUR SPONSORS
JOIN THE DISCUSSION
Close [ x ] More from GovExec
 
 

Thank you for subscribing to newsletters from GovExec.com.
We think these reports might interest you:

  • Sponsored by Brocade

    Best of 2016 Federal Forum eBook

    Earlier this summer, Federal and tech industry leaders convened to talk security, machine learning, network modernization, DevOps, and much more at the 2016 Federal Forum. This eBook includes a useful summary highlighting the best content shared at the 2016 Federal Forum to help agencies modernize their network infrastructure.

    Download
  • Sponsored by CDW-G

    GBC Flash Poll Series: Merger & Acquisitions

    Download this GBC Flash Poll to learn more about federal perspectives on the impact of industry consolidation.

    Download
  • Sponsored by One Identity

    One Nation Under Guard: Securing User Identities Across State and Local Government

    In 2016, the government can expect even more sophisticated threats on the horizon, making it all the more imperative that agencies enforce proper identity and access management (IAM) practices. In order to better measure the current state of IAM at the state and local level, Government Business Council (GBC) conducted an in-depth research study of state and local employees.

    Download
  • Sponsored by Aquilent

    The Next Federal Evolution of Cloud

    This GBC report explains the evolution of cloud computing in federal government, and provides an outlook for the future of the cloud in government IT.

    Download
  • Sponsored by Aquilent

    A DevOps Roadmap for the Federal Government

    This GBC Report discusses how DevOps is steadily gaining traction among some of government's leading IT developers and agencies.

    Download
  • Sponsored by LTC Partners, administrators of the Federal Long Term Care Insurance Program

    Approaching the Brink of Federal Retirement

    Approximately 10,000 baby boomers are reaching retirement age per day, and a growing number of federal employees are preparing themselves for the next chapter of their lives. Learn how to tackle the challenges that today's workforce faces in laying the groundwork for a smooth and secure retirement.

    Download
  • Sponsored by Hewlett Packard Enterprise

    Cyber Defense 101: Arming the Next Generation of Government Employees

    Read this issue brief to learn about the sector's most potent challenges in the new cyber landscape and how government organizations are building a robust, threat-aware infrastructure

    Download
  • Sponsored by Aquilent

    GBC Issue Brief: Cultivating Digital Services in the Federal Landscape

    Read this GBC issue brief to learn more about the current state of digital services in the government, and how key players are pushing enhancements towards a user-centric approach.

    Download
  • Sponsored by CDW-G

    Joint Enterprise Licensing Agreements

    Read this eBook to learn how defense agencies can achieve savings and efficiencies with an Enterprise Software Agreement.

    Download
  • Sponsored by Cloudera

    Government Forum Content Library

    Get all the essential resources needed for effective technology strategies in the federal landscape.

    Download

When you download a report, your information may be shared with the underwriters of that document.