Federal Times Blogs
An undercover investigation by the General Services Administration’s watchdog office has traced second-hand computer equipment originally costing the U.S. government about $25 million to more than a dozen sham educational organizations and, ultimately, back to one man: Steven Alexander Bolden.
Federal prosecutors in Tacoma, Wash., earlier this month filed fraud charges against Bolden, saying he tricked the government into believing he represented schools and thus was eligible for access to GSA’s Computers for Learning program.
Under the program, agencies, as permitted by law, can transfer surplus computers and technology equipment to schools and nonprofit educational groups.
The investigation, which was reported on last week by the Seattle Post-Intelligencer, began last summer after the IG’s office found 13 nonprofit organizations that received computers through the GSA program. While the groups appeared unaffiliated, they all had ties to Bolden, according to court papers.
“There is probable cause to believe that Bolden engaged in a scheme spanning several years in which he impersonated educational nonprofit organizations into giving him government computers and computer equipment,” prosecutors wrote in an affidavit outlining the probe, which was filed in U.S. District Court in Tacoma, Wash., on May 31.
Charging documents said Bolden received thousands of pieces of computer equipment over the years, keeping it for himself or selling computers through online sales sites such as Craigslist, which was subpoenaed as part of the investigation, records show.
An attorney listed for Bolden listed on the case’s docket did not respond immediately to a phone message Monday.
One morning in August 2011, the vice president of an information technology contractor for the federal government awoke, checked his BlackBerry and noticed something strange.
Overnight, as court records would later go on to describe, someone had sent an email from the unnamed executive’s work account to a former employee.
An internal investigation soon led to a federal probe by the FBI and the General Service Administration’s Office of Inspector General.
Now, nearly two years after that unusual email, the former employee, Robert Edwin Steele, 38, stands convicted by a jury in U.S. District Court in Alexandria, Va., of 14 counts of unauthorized access of a protected computer.
In announcing the conviction Friday, federal prosecutors said Steele worked at multiple companies in government contracting, resigning from one known only as “Company A” in December 2010.
But after leaving the company and while working for another contractor, prosecutors said Steele continued sifting through his old employer’s records. All told, he accessed the company’s internal system more than 79,000 times from December 2010 to early September 2011, authorities said.
When sentenced in July, Steele faces up to one year in prison on two misdemeanor convictions and five years on each of 12 felony convictions.
The General Services Administration is canceling Oracle Corp.’s Schedule 70 contract for information technology services because the company failed to meet the terms of its contract agreement, the agency confirmed.
The company can finish work on existing task orders, but agencies cannot place new orders or extend existing task orders with Oracle after May 17, GSA announced on its website Wednesday. Blanket purchase agreements with Oracle through Schedule 70 will terminate on May 17. Agencies can still purchase Oracle software from technology resellers that have Schedule 70 contracts.
An Oracle spokeswoman declined to comment.
“Based on the GSA’s review of Oracle America, Inc.’s IT Schedule 70 contract… which offers only professional services, it was determined that it was not in the best interest of the government to continue the contract,” Mary Davie, an assistant commissioner at GSA, said in an emailed statement.
GSA notified agencies about the cancelled contract on the FedBizOpps website.
Oracle earned more than $387 million in total schedule sales in fiscal 2011, according to data from FedSources. The company earned more than $203 million in direct contracts across the government during that time, according to USASpending.gov.
The company had recently resolved past issues with GSA. In October, Oracle Corp. agreed to pay $199.5 million to settle a False Claims Act lawsuit that alleged the company intentionally gave GSA inaccurate information about discounts it gave to commercial customers and failed to pass those discounts on to the government, according to a Justice Department news release annoucing the settlement.
No reason was given for the schedule contract cancellation on the GSA website. A spokeswoman for Oracle declined to comment.
More details to come …
General Services Administration regional commissioner Jeff Neely’s wife had her own parking space at a federal building, the agency’s inspector general said today — even though she is not a federal employee.
The revelation was the latest nugget to come out of the ongoing conference spending scandal that has already brought down large swaths of the agency’s leadership. And judging by IG Brian Miller’s comments to the Senate Appropriations financial services and general government subcommittee, plenty more is likely to come out. The OIG is conducting “many more investigations,” he said, though he could not say exactly how many.
“Every time you turn over a stone, we find 50 more … instances” of wrongdoing, Miller said. “We find one thing after another.”
Miller said that his office only discovered today that Neely’s wife Deborah had her own space throughout 2012.
Neely apparently brought his wife along to multiple GSA events, including a 2009 scouting trip to Las Vegas to prepare for the infamous 2010 Western Regions Conference — an excursion that resulted in some embarrassing photos.
Rep. Elijah Cummings, D-Md., criticized Neely earlier this week for allowing his wife to take part in agency events at taxpayer expense.
“The impression conveyed by these documents is that Mr. Neely and his wife believed they were some sort of agency royalty, who used taxpayer funds to bankroll their lavish lifestyle,” Cummings said at a hearing Monday.
Neely, who is the Region 9 commissioner for GSA’s Public Buildings Service, is on administrative leave.
Miller told the Senate subcommittee — as he also did yesterday — that Neely often put people down who tried to raise concerns about the spending habits at GSA’s Region 9 and “squashed [them] like bugs.” As a result, a culture grew where people were afraid to speak up when something was wrong.
But that is now changing, Miller said.
“We have been receiving a lot of whistleblower complaints since this report was released,” Miller said. “It has gotten tremendously better.”
Acting General Services Administration head Dan Tangherlini just posted a YouTube video addressing the burgeoning conference spending scandal — and he is not happy. The infamous 2010 Western Regions Conference didn’t just violate travel, acquisition and good conduct rules, he said: It undermined GSA’s entire purpose.
Just as importantly, those responsible violated rules of common sense, the spirit of public service, and the trust that America’s taxpayers have placed in all of us. Among other things, GSA creates and manages the rules and regulations governing travel and conferences. As a result, the actions of those responsible for the Western Regions Conference cut to the heart of what we do and who we are. They undermine both our mission and the trust we have developed with our customers — including the most important customer of all, the American public.
This will “never happen again,” Tangherlini said. He went on to outline some steps that have been taken in response to the revelations, such as an agency-wide review of all conferences and events and the suspension of GSA’s troubled Hats Off awards program, pending a “top-down review.” And in his most stinging rebuke, Tangherlini said:
Serving our customers well is reward enough. It is a signal that our commitment is to our service, our duty and our nation, and not to conferences, awards or parties.
It’s clear that Tangherlini understands just how damaging these revelations have been to GSA — and that he doesn’t want to hear anybody around him say the conference was no big deal. One of his first comments in this damage-control video is, “If you haven’t already, I urge you to read the report. When you do, you’ll see that what took place was completely unacceptable. [...] I speak for the overwhelming majority of GSA staff when I say we are shocked and deeply disappointed by these indefensible actions.”
While most of the scandal around GSA’s lavish 2010 conference in Las Vegas revolves around overpriced mind readers, ridiculously expensive team-building activities and expensive meals, GSA also spent more than $130,000 just to pick the spot where they were going to blow more than $686,000.
So for your reading pleasure, a timeline of all the scouting trips GSA employees took to plan for the conference.
The morning of Monday, October 25, and all of Friday, October 29, were travel days.
GSA published a notice of its planned procurement on February 2, 2009. The subsequent conference planning meetings included the following:
March ’09 Five GSA employees conducted a “scouting trip” to visit nine Las Vegas-area hotels.
March ’09 15 GSA employees returned to visit two of the nine hotels again, staying at the M Resort and the Ritz-Carlton.
August ’09 Seven GSA employees stayed at the M Resort for a planning meeting
November ’09 A second WRC planning meeting, attended by 11 GSA employees, was held at the M Resort following Region 9’s leadership council meeting.
March ’10 16 GSA employees stayed at the M Resort again for a planning meeting.
June ’10 Nine GSA employees attended another planning meeting, this one at a Marriott Hotel in Denver, Colorado.
August ’10 21 GSA employees attended a conference planning meeting at the M Resort.
October ’10 Thirty-one GSA employees traveled to the M Resort for a “dry run” of the conference to be held later that month.
These off-site meetings cost the government over $130,000, including:
- A total of $100,405.37 in employee travel costs.
- Significant spending on catered food and beverages during the various pre-conference trips to the M Resort, totaling over $30,000 for the scouting trip, four pre-planning meetings, and dry run. These charges included $57.72 per head lunches ($44 for lunch plus beverages and a 22% gratuity) and $48.80 breakfasts ($40 plus a 22% gratuity).
- Other expenses, such as audio-visual services and printing costs.
The Obama administration has yet another dashboard on the way.
Dan Gordon, head of the Office of Federal Procurement Policy, told Federal Times in a statement that the administration will launch a dashboard to track agencies’ progress on acquisition reform later this summer.
The administration has had its much-ballyhooed IT dashboard up and running for about a year, and is working on another dashboard to track agencies’ progress toward “high priority performance goals.” Dave McClure at GSA is also working on something called a “citizen dashboard” that we probably won’t see until sometime next year. Some agencies, apparently realizing that the administration thinks dashboards are the wave of the future, have set up internal dashboard systems to track certain areas like IT spending, cyber security, or overall agency progress toward strategic goals.
OMB’s dashboards typically provide public information on how well federal agencies are performing in certain areas, so I assume the acquisition dashboard will rate agencies’ progress toward identifying contracting savings in an effort to hold them accountable for progress toward the president’s goal.
Gordon said in his statement to Federal Times:
“This is just one step to ensure agencies remain vigilant in their efforts to maintain fiscal discipline and achieve the best value for our taxpayers. We will be meeting with agencies periodically to review their progress against their savings plans and risk reduction goals – helping those who are achieving success to sustain and build on those results and working closely with those who are having difficulties to identify actions that can be taken to improve results.”
Steve Kempf, acting commissioner of GSA’s Federal Acquisition Service since April, has been tabbed by administrator Martha Johnson to take on the post permanently. Jon Jordan, a 36-year GSA veteran, has been named Kempf’s deputy. Here’s the memo that Johnson sent out this morning announcing the move:
MEMORANDUM TO ALL GSA EMPLOYEES
FROM: MARTHA N. JOHNSON
SUBJECT: NEW FAS COMMISSIONER
Many of you have heard me speak of this as GSA’s moment. We have set aggressive goals and been challenged to play a leading role in key Administration priorities by the White House. We are on the frontline for championing sustainability, open government, acquisition performance, flexible workplace and more. Leadership and enterprise positioning will be key to our success.
Therefore, I am delighted to announce today that Steve Kempf has accepted my offer to be the next Commissioner of GSA’s Federal Acquisition Service, one of our most critical leadership positions.
As GSA steps forward, so, too, will FAS be facing a challenge. FAS has expertise, operational know-how, and extensive customer knowledge. Used well, these will position FAS to gain further market credibility by offering customer agencies real value as they strive to meet their missions under constrained resources. This opportunity is real and it is now.
At this critical juncture in FAS’ history and as an 18 year veteran of FAS, Steve brings significant expertise to the Commissioner role having served as a contracting officer, lawyer, and business professional. Equally as impressive is Steve’s leadership style. He is collaborative, inclusive and eager for change. I am confident that Steve will combine his deep roots, loyalty, and enthusiasm for FAS and transform it into our customers’ hands down, preferred, acquisition partner.
For starters, Steve has already made strides in:
• Revitalizing FAS’ relationships with its customers;
• Appointing an executive to champion innovation and transformation across FAS;
• Driving forward on the Zero Environmental Footprint goal and other key enterprise objectives;
• Building leadership prowess and a workforce positioned for success;
• Completing and executing the FAS strategic reviews and implementation plans for key programs;
• Deepening change management capacity; and
• Communicating constantly with employees, customers, industry, and stakeholders to bolster FAS’ ability to perform with excellence.
In addition, I am delighted to announce that Jon Jordan will become the permanent Deputy Commissioner. Jon has worked in GSA and FAS’ budget programs for over 36 years and his deep operational knowledge, commitment to excellence and good stewardship of taxpayer dollars will be invaluable to FAS’ future.
Please join me in congratulating both Steve and Jon on their permanent appointments and pledge to give them the support they and FAS will need to turbo-charge its future.
The magazine took the top 100 contractors listed on USAspending.gov and applied the same methodology it uses to produce its annual “100 Best Corporate Citizens” list. (The necessary information was available only for the 37 publicly traded companies on the list.) Firms are judged on their environmental impact, employee relations, corporate governance, financial responsibility, philanthropy, and human-rights policies.
And, drum roll please … the best corporate citizen in government contracting for 2010 is … Hewlett-Packard!!! Well, good for them. Rounding out the top five are IBM, Merck, Dell, and something called McKesson Corp., which I’ve never heard of but is apparently the largest health-care company in the world, according to Wikipedia. Ranking in the bottom five were L-3 Communications Holdings, Honeywell, McDermott, Oshkosh and Valero Energy Corp. — however, a special category of shame is reserved for Pfizer, which isn’t even allowed to be on the list and instead gets a “red card” because it was recently fined $2.3 billion by the U.S. Department of Justice for bribing doctors.
So what are federal acquisition units supposed to do with this information? Well, they’re still trying to figure that out. The Corporate Responsibility Officers Association has formed something called the “Corporate Excellence for Government Roundtable” that is “committed to improving transparency and responsibility among government contractors” will hold its first meeting tomorrow.
It all sort of sounds like a bunch of fluff, but General Services Administration administrator Martha Johnson is taking it seriously: She’s scheduled to speak at tomorrow’s meeting and participate in the discussion. Maybe GSA and other agencies are looking for new ways to take action against shady or unsavory contractors.