WASHINGTON
Federal investigators are raising new questions about whether an affiliate of the controversial security firm Blackwater Worldwide should have received more than $100 million in federal contracts set aside for small businesses.
In a memorandum made public Monday, internal investigators for the Small Business Administration said the agency “did not adequately explain” how it concluded that Blackwater falls within size limits for small-business contracts.
The SBA also disregarded evidence in its own records suggesting that “independent contractors” hired by Blackwater to do security work for the State Department in Iraq were actually under Blackwater’s supervision, the memo charged.
The workers’ status is critical because federal law generally limits small-business contracts to firms with fewer than 1,500 workers. Blackwater would be over that limit if the workers were classed as employees of the firm rather than independent contractors.
The memo, written by Glenn Harris, counsel to SBA inspector general Eric Thorsen, refers to “potential misrepresentations by Blackwater” but does not accuse the Moyock, N.C.-based firm of breaking federal laws or improperly obtaining contracts.
It was unclear Monday how or whether the SBA will follow up on the findings.
Anne Tyrrell, a Blackwater spokeswoman, called the SBA memo “unnecessarily speculative.” She released a statement asserting that everyone working in Iraq on government contracts with Blackwater is “under the direct operational control of the United States government” and not working for Blackwater.
Two of Blackwater’s competitors appealed the SBA’s decision, and in December 2006, the agency dismissed that appeal.
In an e-mail to The Virginian-Pilot, SBA spokeswoman Christine Mangi said the SBA considers numerous factors in determining whether an individual is an employee or a contractor. “No one factor is more important than another,” Mangi wrote. The agency cannot reopen that decision because it was the subject of an appeal, she added.
The memo released Monday stems from questions first raised in a letter to the SBA last spring from Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee and a persistent Blackwater critic.
In a statement released Monday, Waxman said it appears that Blackwater “misled contracting officials who in turn ignored blatant warning signs. It is deplorable that no one ever looked out for the interests of the federal taxpayer.”
Federal procurement records show that since 2000, Blackwater and affiliated firms have received more than $144 million worth of contracts set aside for small businesses, Waxman has charged. One Blackwater affiliate, Presidential Airways, was the focus of the SBA inquiry triggered by Waxman.
Waxman’s staffers released the SBA memo along with a cover letter in which they said the agency’s findings raise “serious concerns about whether Blackwater made false statements about its small business status.”
They added that under federal law, “misrepresenting a business as a small business concern in order to win a federal contract is a criminal offense punishable by a $500,000 fine and up to ten years in prison” as well as “suspension and debarment” from future federal contracts.
Dale Eisman, (703) 913-9872, dale.eisman@pilotonline.com
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no bid contracts
Can be the root of all evil. We have all seen the scam of Halliburton/Cheney, why does our government continue to engage in such an act?
It does not take a contracting expert
to question the wisdom of an $8B no-bid contract for Iraq -- and we also see how well the no-bid contract for Katrina relief went. And both were given to the same company, and guess who had ties to the company? The Bush administration. And check out the news on these contracts - bilking for food services, eletrocuting soldiers in showers, and that is only two examples. Under the law, the food-services fiasco would have resulted in a lifetime ban for a defense contractor. Don't believe me, look up the law. And in this situation, it should bar BW from further defense contracts -- but we know that won't happen.
"Bush want to go down in
"Bush want to go down in history as expanding democracy. But what he will go down as the most corrupt government since Iraq. He gave no bid contracts to his cronies, protected them form investigation -until the new congress, and pardons those he cannot hide. For Blackwater to say they have been cleared is ludicrous. They were cleared by Bushe's people and we know from the Pilots front page their ethics."
Reminds me of what the Clintons did at the White House Travel Office. Remember how they got rid of long time career employees so they could install their friends in the same positions? Oh yeah, that's okay because they were Democrats. It's a double standard, right?
"Clinton pardoned hundreds of "friends & Felons""?
"BTW GordonWall, Bill Clinton pardoned hundreds of "friends & Felons" the last evening of his Presidency, who are now back in our society continuing to commit their criminal activities?"
pLamastra talks of truth and tells such bold-faced lies. Clinton pardoned 140 on his last evening in office.
SBA handout???
"Isnt the SBA just another affirmitive action handout?"
No it is not. Check into it if you don't believe me. Affirmitive action has nothing to do with it.
Romes destruction!
The same reasons many of the individuals who departed the military and opted to work for companies like Blackwater are relevant once again. Accomplishing the mission is no longer the goal of our present political quagmire, ensuring wall after wall of bureaucratic nonsense is.
Until our leaders are concerned with the people of this country instead of doing all they can to make the other party look bad this countries demise is immanent.
lack of understanding
Ignorance is bliss. Do some research, more than just your favorite biased websites.
Do you know what no-bid contracts are, when they can be used, when they can't? Do you know how many no-bid contracts have been awarded under this and previous administrations? Do you know how many goods and services the govt depends on contracts for? Do you know the oversight rules? Do you know that contractors can't perform inherently govt functions, and that personal service contracts are prohibited? Do you know when a govt employee can and cannot supervise a contractor?
Do you know what congressional districts are home to the biggest defense contractors??
Read a blog and you think you're a contracting expert. Trust me, I can see by reading the comments that most of you are not.
jmo
Isnt the SBA just another
Isnt the SBA just another affirmitive action handout?
They went to BW becuase they were dependable and good. Enough said.
We're fortunate to have Blackwater!
DITTO........truthjustice, Big Mike, & jfr.......
"Leave Blackwater alone".......They do an incredible (and very dangerous) job. The "useless UN" is a joke!
BTW GordonWall, Bill Clinton pardoned hundreds of "friends & Felons" the last evening of his Presidency, who are now back in our society continuing to commit their criminal activities? Hmmmmmmm
under the direct operational control of the US gov't?
It was not the US gov't that sent the four BW employees into Fallujah with inadequate arms and armor where they were burned alive and some hung from a bridge. It was BW.
Blackwater Fan
Blackwater has gotten the job done - period! Right from the beginning. Give it to some company with 40 employees and see if they can do what Blackwater has done. All of the liberal Democrats will always blame anything that happens on GW regardless if the outcome was positive or not. So, let's slap a couple hands so that we can swing a couple "fence sitters" over to the other side. I hope you're saving your money; to include the "stimulus check" that GW gave you, for the tax increases you'll see if Obama gets elected and converts us all to Socialism.
Look it up!
Can you say military industrial complex...just ask Dwight D Eisenhower why he warned us against it in his departure address as President. There is also a good book about how crooked and unjust Blackwater is. This how Bushy and his neo-con cronies run wars now, lets just contract it out, we will let our kids pay for it!
Bushes Legacy
Bush want to go down in history as expanding democracy. But what he will go down as the most corrupt government since Iraq. He gave no bid contracts to his cronies, protected them form investigation -until the new congress, and pardons those he cannot hide. For Blackwater to say they have been cleared is ludicrous. They were cleared by Bushe's people and we know from the Pilots front page their ethics.
Give it a break
Let's face facts for once. BW and other PMC's( private military contractors) are doing the job over there and keeping our military out of stuff they need not do in the first place such as providing protection for politicians looking to build some positive press while visting war torn areas.
Perhaps the ( PMC's) should just pull out and let the UN do the peacekeeping??? Oh wait that won't work, look at Rwanda, Sierra Leone and other hot spots the UN went in and failed miserably.
Even our own State department knows who to go to when they need protection. IF BW didn't do the job and do it exceptionally well they would have not won any US contracts.
What a worthless waste of money this investigation is.
There has already been multiple investigations of Blackwater by SBA and others. Blackwater is performing a very valuable service to the US. It's status as an employer has been investigated. Waxman and others like him need to stop wasting our tax money for their partisan bull, then maybe he and others like him can actually accomplish something worthwhile. Just how many businesses like Blackwater do you think exist? How many have the resources and capabilities of Blackwater? I witnessed the introduction of all this requirement to support small or minority owned businesses in shipbuilding. It has turned out to be not only an expensive endeavor, but also has damaged the Navy shipbuilding industry. The same could be said for the requirement to send ship repairs to private yards vice public yards or small private yards vice large private yards. This has harmed the quality of our US fighting ships. The same can be said about this investigation, it is harming the US.
responsibility
If someone broke the law then they need to be helb responsible, whether Blackwater, SBA, or both. Yes oversight is lacking on govt contracts worldwide.
To assume this is a republican conspiracy is premature and unwarranted.
jmo
Democrat Interpretation of Law
Waxman should also investigate Us Rep. Robert Wexler, who is supposed to be representing the citizens of South Florida. Come to find out, the man doesn't actually live in Florida. Only his parents do. I suppose if your parents live in a state, that makes you a resident of that state as well, by Democrat interpretation of laws?
Government Paid Mercenaries
Why do we have our sons and daughters fighting a war where they come backk home and receive no benefits, yet allow a mercenary group of ex-soldiers receive millions of dollars and get rich? Blackwater needs to disbanded and all of the Executives stripped of their assets. The company needs to be burned to the ground for the amount of money it has stripped our government of and the Republican fools who abided by their contracts need to be jailed.
Imagine that
Given this administrations penchant for giving contracts, especially no-bid contracts (thank you Iraq, Afghanistan and LA), this story should not be that much of a surprise. It's sad. I just hope that the Pandora's box of contracts has not been opened...We need much more oversight - democrat or republican.
They do the job
They do the job and do it well. Just leave them alone. I'm sure they probably even helped protect bHo when he was over there visiting members of his extended family.
jets
Did the military leave the keys in them? LOL
What about the jets?
What about the fighter jets that Blackwater is believed to have stole from Iraq after the initial invasion?