Monday, February 26, 2018

Update on One-Person Company Awarded $156 Million Contract

A couple of weeks ago, we reported on a one-person company that had been awarded a $156 million contract by FEMA (Federal Emergency Management Agency) to deliver 30 million emergency meals to victims of the recent Puerto Rico hurricane. From the beginning, the company was unable to deliver so FEMA terminated the contract for default. This contract award has come under scrutiny by the House Committee on Oversight and Government Reform who has asked FEMA why, given the poor track record of this company, it awarded this contract where time was of the essence.

Now the Senate Committee on Homeland Security and Government Affairs is weighing in on the debacle, after reviewing the actual contract. The Senate Committee writes,
Unfortunately, this contract appears to be further evidence of systemic weaknesses in FEMA's contracting practices. In particular, we are concerned that FEMA is not taking appropriate steps to evaluate vendors' qualifications before awarding contracts to provide critical disaster relief supplies. In November 2017, FEMA cancelled $30 million in contracts for emergency tarps and sheeting after Bronze Star, LLC (Bronze Star) - a two-person company with no past experience - failed to deliver. FEMA's awards to Bronze Star raised concerns about how FEMA is ensuring that contractors with limited performance records have sufficient capacity to meet a contract's requirements. FEMA's decision to award a $1456 million contract to Tribute underscores this concern, and raises additional questions about FEMA's contract award process.
The Committee goes on to note that Tribute had no experience delivering on a contract of such scale but its past performance on previous Government contracts should have raised red flags when FEMA was evaluating prospective contractors (see One Person Company is Awarded $156 Million Contract). Not only did the Senate note the same pattern of poor performance that the House did, but also questioned it integrity and business ethics based on an inspector general report finding that Tribute altered and submitted a false shipping document and failed to follow subcontracting rules.

Now the interesting part. The Committee found that Tribute's proposal contained numerous contradictory or unintelligible assertions. The overwhelming majority of Tribute's 9-page proposal was plagiarized from several sources readily available on the internet (amazing that a 9-page proposal would yield a $156 million contract). For example, language in Tribute's "Delivery Plan" section is nearly identical to sections found on the websites of a global logistics company and a Florida medical transportation company. The Senate letter details several of these plagiarisms. Not only was the content of Tribute's proposal plagiarized, but it was misleading. For example, Tribute using terms and phrases such as "our logistics professionals", "each ... employee", "management team" is very misleading given that it is a one-person company.

The Senate Committee is asking FEMA for an explanation of how this occurred. You can read the very interesting Senate report in its entirety here.

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