Legal Meets Practical

There is an Office episode where Michael Scott, fearless leader of the Dundler Mifflin Scranton branch, chastises receptionist Pam Beasley for not knowing where to file faxes received from corporate headquarters:

“How many times have I told you that there’s a separate filing cabinet for things from Corporate?” <Proceeds to throw fax message into the trash, laughs>.

When Michael Scott makes this joke, it’s hilarious. (Reminder – Steve Carell is now an Oscar-nominated actor). “Haha, this document’s from Corporate, so it clearly must not be important.”

The idea of the VA carelessly shredding documents important to veterans’ claims, however, is no laughing matter. Every piece of paper that comes in to VAROs relating to a veteran’s entitlement to service-connected disability compensation should be treated with the utmost care. Unfortunately, it’s not hard to imagine the opposite of what should be expected – I’ve learned of documents put in wrong folders, thrown away, misplaced (sometimes forever), etc.

A “special filing cabinet?” Let’s hope that not many pertinent documents find their way in there. Because there probably isn’t much of a recourse. In fact, the OIG Report merely “recommended” that the VARO Director implement training to handle processing of claims-related and government documents, and to “take proper action on the eight cases that had the potential to affect veterans’ benefits.” What does that even mean? And how many other unidentified cases are out there?

Access the VA OIG’s Report on this issue here.

Nothing bothers veteran business owners doing work for the federal government more than the idea of fraudulent companies taking that work away. That’s why there are service-disabled veteran-owned small business (SDVOSB) status protests, as well as – more sensationally – fraud tips lodged with the Department of Veterans’ Affairs (VA) Office of Inspector General (OIG) hotline.

With status protests, a company that loses an award to another company on an SDVOSB set-aside protests on the ground that the awardee isn’t actually an SDVOSB. It could be that a non-veteran runs the business, or the veteran doesn’t have the right ownership percentage (51% or more), or the “veteran” isn’t a veteran at all. If the protest is sustained by the Small Business Administration, the agency will yank the award from the awardee and give it to the next in line.

VA OIG tips, however, are more – dramatic, shall we say. These are tips made to a hotline because a veteran business owner suspects that someone is defrauding the Veterans First Contracting Program (which is the means by which the VA awards set-aside contracts to veteran-owned businesses).

As LMP recently learned via a Freedom of Information Act request to the VA, from January 1, 2013 through August 1, 2015, there have been 124 complaints made to the VA alleging fraud under the Veterans First Contracting Program. There have, however, only been three firms prosecuted for fraud. And only seven have been debarred (which is when a firm is banned from federal government contracting because of the finding of a serious lack of integrity, such as by the commission of a fraud or the serious default under a contract).

What does this mean? This means that of the 124 fraud tips the VA OIG has received over the last two and a half years, only 2% has resulted in a prosecution, and 6% has resulted in a debarment.

And this is assuming that of the prosecuted or debarred firms, their punishment resulted from a fraud tip. In the FOIA request, I requested the total number of firms prosecuted or debarred; I didn’t restrict that number to those businesses exposed by fraud tips. Some of these prosecuted or debarred firms may have been reported by contracting officers or other government officials. Accordingly, the “success” rate of VA OIG fraud tips is even lower, perhaps substantially so.

The point here is that while the VA OIG hotline serves an important purpose, it’s not the fraud alarm veteran business owners want it to be. Three firms prosecuted, and seven debarred: with the well-publicized stories of the fraud that exist in the Veterans First Contracting Program, that number seems incredibly low. But as long as claims are made in good faith, and investigated as they should be by the VA OIG, the hotline serves its purpose.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran business issues at https://legalmeetspractical.com.

For everyone who regularly follows my blog, thank you! I’m doing things a little differently this time by updating some of my prior posts. For example, what has happened with certain disgraced VA employees? What is the VA’s Center for Verification (CVE) up to? How’s that disastrous Colorado VA construction project coming? See below…

• The VA Accountability Act has passed the House! I blogged on this just last week – this bill gives the VA an expanded right to fire or terminate employees, expands employees’  probationary periods (after which it becomes very difficult to fire them), and it also affords greater whistleblower protection. It now has to pass the Senate and be signed by President Obama (who has expressed that he will veto it). For a particularly insightful take on the bill by a VA employee, see the comments to my prior blog.

• Kingdomware Parties Prepare Briefs.  Kingdomware (Petitioner) has until August 18th to file its brief on the merits with the Supreme Court, and the VA (Respondent) has until September 29, 2015. The parties have been duking out this issue since 2012 in multiple forums, and the resolution has the potential of majorly affecting veteran-owned small businesses.

• Colorado VA Construction Project Limps On.  In what has been dubbed as the “biggest construction failure in VA history,” the VA continues to try to stop a major cash hemorrhage. Interestingly, despite coverage several months ago stating that the project was already years behind and billions over budget, the press has been relatively silent this summer. The latest update is that the VA is scrambling to find the money needed to finish the project, and is facing budget cuts within its own programs to come up with the cash.

• The VA’s Center for Verification and Evaluation’s (CVE) Gripe Session.  In an attempt to seek input from the veteran community, the VA’s CVE (the entity that processes business applications for the VA’s set-aside award programs) is holding focus groups (invitation only). I was invited as a member of the focus group, but was disappointed to learn that I had to appear in person in Washington, D.C. or not at all. Hopefully the CVE will find a way to allow individuals to appear telephonically, as to not do so will limit participation to only those within the Washington, D.C. metro area (or to those who foot their own bill for the travel).

• VA Employee Facing 50 Federal Charges.  A VA employee accused of altering medical records has been placed on administrative leave and is now denied access to all of VA’s systems. In a federal indictment, authorities allege that the former Chief of Fee Basis at Charlie Norwood, Cathedral Henderson, terminated unresolved consults by saying the patients had completed or refused services. If convicted, he faces a maximum sentence of 5 years in prison and a $250,000 fine on each count.

That’s the scoop. And as a note, many veteran readers have not been shy about sharing blog topics. This is an open forum, so please do the same if you feel strongly about a particular topic or story.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran business legal issues at: https://legalmeetspractical.com.

This isn’t exactly a great ratings move, but President Barack Obama doesn’t have to worry about being re-elected.

On April 23, 2015, a bill entitled the Veterans Affairs Accountability Act was introduced in both the House of Representatives and the U.S. Senate (H.R. 1994, S. 1082). This bill was just (July 29th) passed by the House, and it is now before the Senate (remember that each has to pass an identical version for it to make its way to our President for signature). As such, it now looks like it might be presented to President Obama very soon.

Unfortunately, however, in a press statement released by President Obama this week, it looks like the bill might stop with him…literally.

The President called the bill “counterproductive” and said it would create “a disparity in the treatment of one group of career civil servants.” President Obama’s statement also said the bill would “have a significant impact on VA’s ability to retain and recruit qualified professionals and may result in a loss of qualified and capable staff to other government agencies or the private sector.”

“These provisions remove important rights, protections, and incentives which are available to the vast majority of federal employees in other agencies across the government and are essential to ensure that federal employees are afforded due process,” the statement said.

The bill, which is a follow-up to the Veterans Access, Choice, and Accountability Act, would expand the VA’s ability to fire incompetent or corrupt employees, going beyond executives to also encompass lower level employees.

Not only that, but the bill would provide that an individual may be demoted for performance or conduct reasons, and therefore subject to a lesser grade of pay. That individual also may not be placed on paid administrative leave while they appeal the demotion.

In addition, the bill would extend the probationary period of new employees to 540 days (currently one year). Only after 540 days does that individual become a “covered” employee, which means it is therefore much more difficult for that individual to get fired (i.e., by extending the probationary period, it gives the VA a longer period of time to weed out incompetent employees).

As one might expect, the bill is supported by many veteran organizations, but opposed by government unions. According to govtrack.us, it also only has a projected 25% chance of passing in the Senate. (However, the same source says it has only a 15% chance of wriggling through the House, but it did get through with a vote of 256-170). So perhaps President Obama won’t get the chance to stamp “veto” across it anyway.

What do you think? Is the bill an extreme measure that risks infringement of  VA employee due process rights? Or is it a necessary and permissible procedure to clean house? Please use the comments section below to weigh in.*

*For an extremely eye-opening weigh-in by a VA employee, see the comment I have posted below. I’ve had the pleasure of working with this individual professionally over the last several years, and I can say that she represents the exact type of caring, exemplary employee the VA should be fighting to keep within its ranks.

**Did you find this article informative? If so, sign up for Sarah Schauerte’s weekly legal blog on veteran legal issues at: legalmeetspractical.com. Remember to click the link to activate your subscription!

As everyone who follows this blog knows, it is a weekly blog. And for the last three weeks, it has been missing from your inboxes! This is because I have been in South Korea, attending the wedding of the little guy featured below. (Who, as you can see, is no longer a “little guy.”). This is my brother, Bryan, who for the last five years has been in Korea teaching English. And the USA gets him back permanently this month!

Because I have neglected my readers (and for that, I do apologize), below is a summary of the news I would have covered had I not been otherwise engaged. Dear readers, know this neglect was unintentional, unavoidable, and will not happen again!

Now for the news…

• VA Employee Indicted. A 50-count Department of Justice (DOJ) indictment, recently unsealed in federal court, has charged a U.S. Department of Veterans Affairs (VA) employee at the Charlie Norwood VA Medical Center in Augusta, Georgia with crimes related to his alleged falsification of medical records of numerous VA patients. The indictment alleges that Mr. Cathedral Henderson terminated unresolved consults – medical appointments that had not been scheduled or completed – by falsely stating in VA patients’ medical records that “services have been completed or patient refused services.” As a result of the indictment, the VA has terminated Mr. Henderson’s access to all of VA’s systems and placed him on administrative leave for the time being.

• Increase in Vet Wait Times Not VA’s Fault? One year after the VA Phoenix scandal sparked national outrage, the number of veterans on wait lists to receive medical care is 50 percent higher than at the same time last year, according to VA data. HOWEVER, these stats may not be wholly the VA’s fault – its leadership attributed the growing wait times to soaring demand from veterans for medical services, brought on by the opening of new centers and a combination of: aging Vietnam veterans seeking care, the return of younger veterans from Iraq and Afghanistan, and the exploding demand for new and costly treatments for Hepatitis C. The embattled VA says that its vast health-care system has handled 2.7 million more appointments than in any previous year, and has increased its capacity by more than 7 million patient visits per year, double what they anticipated, the New York Times reported this summer.

• McDonald’s Happy Meal May Come from Veterans Choice Program. VA Secretary Robert McDonald has consistently represented that the end of next week, he expects Congress will endorse transferring up to $3 billion from the Veterans Choice program to close the VA’s budget gap. He also testified this week before the House Veterans Affairs committee on the need for lawmakers to close a $2.5 billion shortfall, which has been driven over the past year by a big increase in demand among veterans for health care services. (The affected Veterans Choice program is a temporary benefit that allows eligible Veterans to receive health care in their communities rather than waiting for a VA appointment or traveling to a VA facility. You can learn more about the program here, as well as read complaints that it in effect is impossible to use here).

Hopefully next week I can report on more positive news from the VA. Thanks for reading!

First and foremost, happy Independence Day from Legal Meets Practical, LLC! I hope everyone has wonderful plans for the long weekend.

For those of you who follow my blog, you also likely know that I distribute a quarterly newsletter capturing major news items of interest to veterans. We’re now due for the summer edition, which you can access HERE.

There’s been a lot of juicy stories involving the VA lately – some of them scandalous, and some of them directly affecting those competing for federal government contracts. Below are just a few topics covered in this quarter’s edition:

• The Supreme Court’s grant of cert to Kingdomware, a case the veteran business community has followed closely because it involves the VA’s position that it need not set aside opportunities on the Federal Supply Schedule to veteran-owned businesses.
• A Norfolk pastor’s fraudulent submission of over 90 VA claims forms, and why his plan was doomed from the beginning.
• The Jan Frye memorandum leaked to the press, which details how the VA awards billions of contract dollars each year in violation of federal procurement practices.
• Impressions from the National Veteran Small Business Coalition’s annual conference.
• The resignation of Jeffrey Gault from the VA’s Center for Verification and Evaluation and the substantive changes he’s made to the VetBiz program.
• The VA’s $100 million bailout related to a project dubbed the “biggest construction failure” in the history of the VA (and where the VA plans on getting the money to finish it).

Hope you enjoy it. And thank you to all of those who have served our country to keep us free on this important holiday!

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

As a veterans advocate and attorney, I deal with Department of Veterans’ Affairs (VA) employees a lot. And here is something that might surprise a lot of people – some of those individuals are outstanding. There are individuals within the VA that truly and passionately care about their mission to help veterans, work long hours, and in general go above and beyond.

The problem is, you don’t hear about these individuals. The VA doesn’t have an “Employee of the Month,” or showcase the employees who make a difference. In fact, it’s hard to make a difference – as cliché as it sounds, the government is all about red tape and bureaucracy. You have a great idea? Write a memorandum about it and see where it goes.

One VA employee falls into the category of one of the VA’s outstanding folks, and has in fact effected substantive change. And guess what?

He’s gone now.

That individual is Jeffrey Gault, who just left his post as Acting Director of the Center for Verification and Evaluation (CVE) last week. (The CVE is the entity that approves veteran-owned businesses for set-aside opportunities with the VA).

A veteran of the U.S. Army who served two deployment in the Middle East, Mr. Gault has spent the last year and a half commuting between his home in Dallas and the CVE’s location in Washington, D.C. He will now focus full-time on running a Texas non-profit organization called The Army Scholarship Fund, which is a charitable, non-profit organization dedicated to providing college scholarships for undergraduate study to children of current and former members of the U.S. Army, and to spouses of currently serving soldiers.

As an attorney who dealt with the CVE a lot, I’ve seen how the process has evolved and improved since Mr. Gault took the helm. For example:

• In general, the process has become more streamlined, and the application examiners have been making less mistakes because of additional training. That’s thousands of hours saved by veterans applying for verification.
• Under Mr. Gault’s direction, the pre-decision and pre-determination processes have been refined and improved. These replaced the request for reconsideration process, which effectively meant that if you got denied verification, you had the pleasure of  a six-month wait.
• Mr. Gault has reached out to the veteran community for input into improving the CVE, and has implemented change where possible.
• The CVE was certified by the International Organization for Standardization (ISO) as fully compliant with ISO9001 standards for its operations, processes, metrics, and quality of work. There are very few organizations within the VA or the federal government which meet this strict set of criteria for operations and quality.

I’m not saying here that the criticisms aimed at the VA aren’t well-deserved. Quite frankly, I’ve had nothing positive to blog about for months – every post has been about the VA wasting billions in federal contract dollars, the VA Secretary’s resignation, the Phoenix OIG report, the elf on a shelf scandal. the Colorado construction contract catastrophe…I could go on. (And in fact, this article could be construed as negative, as Mr. Gault is leaving).

But point being, we should always acknowledge the individuals within the VA that do make a difference, given that its mission of helping veterans is of paramount importance to our country.

And especially that given the unique nature of the federal government, going above and beyond doesn’t always have its rewards.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

“May the odds be forever in your favor.”

So goes the saying from the incredibly popular HUNGER GAMES franchise, rendered darkly amusing by the fact that for those participants in the dystopian society’s annual Hunger Games (i.e., the sacrifice of two youths from each district, save for one actual winner of the “games”), the odds are most, decidedly, not in one’s favor.

The Supreme Court is another place where the odds are not in someone’s favor. Every year, the Supreme Court receives about 10,000 writs of certiori (petitions asking it to hear a case that has been decided by a lower court). Of those, the Supreme Court decides to hear about 80. That means that each case has less than a one percent chance of being heard.

And on June 22, 2015, the Supreme Court decided that Kingdomware will be one of them.

Most veteran business owners have heard of Kingdomware, but here’s the recap:

The Kingdomware saga began with a slew of GAO rulings in 2012 that berated the VA for not following its mandate in the Veterans Benefits, Health Care, and Information Technology Act of 2006 (the “Act”).

The Act provides that before using Federal Supply Schedule (FSS) procedures, a contracting officer must determine whether he has a reasonable expectation that: 1) two or more service-disabled veteran-owned small businesses (SDVOSBs) will submit offers; and 2) the award can be made at a fair and reasonable price. If the answer is “yes,” the award must be set aside for SDVOSBs. (38 U.S.C. 8 127(d)(2006)). The idea is to maximize awards to SDVOSBs, as a purpose of the act is to protect veteran businesses.

Long story short, the VA decided that despite this provision under the Act, it wasn’t required to set aside awards off the FSS for SDVOSBs, awarded to non-SDVOSBs, and got beaten down by the GAO (that’s a legal term). See Kingdomware Technologies, Inc., B-406507 (May 30, 2012); Aldevra, B-406331 (April 20, 2012).

The VA won the next battle, staged at the U.S. Court of Federal Claims (CoFC). In November of 2012, the CoFC ruled that the VA acted reasonably in determining that it need not set aside FSS contracts for SDVOSBs. In finding that the VA had not acted “arbitrarily, capriciously, or contrary to law” (another legal term, only this one’s real), the CoFC held that the VA had reasonably interpreted its own law in finding that it was not mandated to set aside awards to SDVOSBs. This decision was also affirmed in a federal circuit decision issued in June of 2014.

Not happy with this result, two veteran organizations – the American Legion and the National Veteran Small Business Coalition (NVSBC)  – petitioned the Supreme Court. And now, it’s official – they will be heard.

I have to wonder – does timing play a huge role in the Supreme Court’s decision? The granting of cert comes very soon after Jan Frye’s explosive memorandum (reporting billions of dollars awarded by the VA in violation of its own procurement policies/laws), the Phoenix scandal (blatant violation of wait times), and the Denver disaster (VA medical center construction plagued by delays and huge cost overruns). Among other VA scandals.

At any rate, they will be heard! Stay tuned here for updates.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

A Bronx VA hospital is under a federal investigation after the Department of Veterans Affairs discovered some questionable purchases by the facility that can’t seem to be explained. And this is one mystery the taxpayers want solved.

As of this Monday (June 15), the VA Office of Inspector General is investigating whether Bronx VA hospital employees have abused government-issued purchase cards, or “GPCS,” which authorize purchases under the micro-purchase threshold of $3000. It is not permissible for the government to split purchases in order to avoid exceeding this threshold.

According to a recent memorandum addressed to VA Secretary Robert McDonald by Jan Frye, deputy assistant secretary for the VA, the Bronx facility engaged in this illegal splitting. It spent over $50 million on prosthetic limbs in two years through purchases made at least 2,000 times. Each purchase totaled $2,999 — just one dollar bellow the VA’s $3,000 GPC limit.

According to the Washington Post, which seems to have had the scoop on this story, when Congress learned of this practice, it demanded answers. The VA did not, however, turn over any documentation to authenticate the purchases. Instead, it claimed they were destroyed during Hurricane Sandy.

The House Veterans Affairs Subcommittee on Oversight and Investigations didn’t buy this excuse. Led by Kathleen Rice, a New York Congresswoman, it called for an investigation during a series of hearings concerning spending practices of the VA.

“The damage caused by Superstorm Sandy was devastating and far-reaching, but the claim that all of these documents were destroyed strikes me as all too convenient and must be substantiated,” Rice said in a statement. “We need to know exactly what happened to the documents, how and why this money was spent without written contracts, and who is accountable.”

Bronx is not alone here. This case was one of several acquisition practices Frye described in his memo. According to the memorandum, the VA spends billions of dollars each year on medical supplies and services in violation of federal procurement laws. Frye’s memorandum lists not only VA facilities, but the names of VA officials.

In the months to come, expect other shakedowns like this one. Who’s next?

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran issues at: https://legalmeetspractical.com.

UPDATE: If you read my prior blog on the Jan Frye memorandum (detailing the VA’s “mockery” of spending rules resulting in $6 billion being spent improperly on an annual basis) and would like to read his memorandum, access it HERE.

Tomorrow I’m headed to Norfolk, Virginia to speak at the National Veteran Small Business Coalition’s (NVSBC) annual conference, which is designed with the same mission my company has: to help veteran-owned small businesses grow. While I’ve already blogged on this conference, a recent Department of Justice press release illustrates how important continuing education is for federal contractors.

You know why? Because if you violate the federal government’s rules, you could end up in jail. And who wants to wear orange for the next ten to twenty?

A June 3, 2015 Department of Justice press release illustrates this principle. Basically, this memorandum details an alleged “pass-through scheme” where one brother used another brother’s service-disabled veteran status in order to pursue service-disabled veteran-owned (SDVOSB) set-aside contracts.

The Puerto Rico indictment alleges that the service-disabled veteran was employed as a full-time U.S. Postal Service Carrier, and he was not in charge of the day to day operations of the SDVOSB. He was simply a figurehead or “rent-a-vet,” who was being used for his service-disabled veteran status to obtain contracts for his brother’s company. Per the indictment, as a result of the scheme the company unlawfully received set-aside and/or sole-source SDVOSB contracts from the VA, including contracts involving American Recovery and Reinvestment Act funds.

If convicted (and keep in mind that these are simply allegations; these individuals are innocent until proven guilty), the brothers face a term of 20 years in prison as to each wire fraud charge and up to ten years in prison for the charges of major fraud against the United States. Additionally, they face fines of up to $250,000 and up to three years of supervised release as to each count.

It’s true that some people set out to defraud the federal government. There are pass-through schemes, and fraud, and general unsavory activities. Then, however, there are the folks who don’t know any better. They think, “hey, my cousin/brother/father/dentist is a veteran; why not set up a company in his name and go after set-aside contracts?”

If those people do their homework – by going to a conference, inquiring on LinkedIn, contacting their local Procurement Technical Assistance Center (PTAC) – that plan will get shot down pretty fast. Or maybe they’ll find a way to ensure they meet the SDVOSB eligibility requirements. (For example, a veteran business owner can have a business listed in the VetBiz database while working full-time elsewhere. It all depends on the circumstances whether that veteran business owner still “controls” the SDVOSB and meets its “full-time” requirements). While this might not be the case here – or these folks could be completely innocent – the fact of the matter is this does happen. People get in trouble because they don’t understand how big a deal it is to certify eligibility for set-aside awards.

When you do business with the federal government, you’re held to a higher standard. If you’re certifying yourself as meeting the requirements for self-aside contacts, you’re putting yourself out there. Protect yourself by doing your homework! Otherwise you might find yourself wearing orange.

*Did you find this article informative? If so, sign up for Sarah Schauerte’s legal blog on veteran business issues at: https://legalmeetspractical.com.