Legal Meets Practical

Nearly two years after his indictment, a Georgia man was sentenced to two years in prison for fraudulently obtaining several government contracts reserved for service-disabled veterans.

One might argue Mr. Arthur Singleton got off easy. In the 2011 indictment, Singleton was charged with 14 counts of wire fraud and one count of major fraud against the United States. The wire fraud counts each carried a maximum sentence of 20 years in prison and a fine of up to $250,000, and the major fraud count carried a maximum sentence of 10 years in prison and a fine of $1,000,000.

We’ve all heard the stories about fraud in the SDVOSB contracting program, but here’s what’s wild about this one: the contractor’s bid protest may have been what raised government suspicion.

According to the information presented in court, Singleton owned a construction firm named Singleton Enterprises and had over 30 years of experience in the construction industry. In 2007, Singleton approached a Vietnam veteran, who was bedridden from surgeries due to his combat injuries. Long story short, Singleton convinced the veteran to create a solo proprietorship: GMT Mechanical (GMT), which was an alleged SDVOSB. Singleton, which was Singleton’s solo proprietorship, was a non-SDVOSB. Together, the two solo proprietorships formed a joint venture which Singleton held out as an SDVOSB.

From September 2007 to September 2008, the joint venture entered into contracts with the United States Department of Veterans Affairs (VA), the Department of Agriculture, the United States Coast Guard, and the United States Army Corps of Engineers, to perform construction work around the country. According to the U.S. Department of Justice press release, Singleton misrepresented the joint venture as eligible to participate in the set-aside program, all the while knowing it didn’t meet the requirements: the veteran performed no work for either company, did not have an ownership stake, and did not control the management or daily operations of either business. In all, Singleton obtained $1.5 million through these fraudulently-obtained set-asides.

Here’s where it began to unravel. In January 2008, Singleton successfully protested the VA’s rejection of his bid as “non-responsive.” There, the VA had conducted a total set-aside for SDVOSBs, requiring firms to certify that they were eligible SDVOSBs. Singleton’s joint venture had not done so. This protest was sustained because the failure to certify does not make a bid non-responsive. As noted by the GAO, “responsiveness involves whether a bid as submitted represents an offer to perform, without exception, the exact thing called for in the solicitation so that, upon acceptance, the contractor will be bound to perform in accordance with the IFB’s material terms and conditions.” The GAO did, however, recommend that the VA forward the matter of the joint venture’s eligibility to participate in the SDVOSB program to the SBA.

The VA contracting officer promptly protested Singleton’s SDVOSB status. In the subsequent examination by the SBA’s Director for Government Contracting (D/GC), it found the joint venture failed to meet the eligibility requirements for the SDVOSB program. GMT was wholly reliant on Singleton, and therefore its owner could not exercise “independent business judgment…without great economic risk because a non-service disabled veteran, Mr. Singleton, has the power to control GMT.” Also, the D/GC found that the joint venture had violated 13 CFR 121.103(h), which prohibits a joint venture from submitting more than three offers over a two year period. The joint venture had submitted at least ten bids or offers on VA projects. The D/GC disallowed the joint venture from submitting offers on future SDVOSB procurements unless the determination of ineligibility was overturned.

And was it overturned? Nope. On appeal, the SBA Office of Hearings and Appeals (OHA) sided with the D/GC, finding no clear error of law had been committed and confirming the joint venture’s ineligibility to bid on future SDVOSB set-asides.

Three years later came the indictment. As you might note, all the charges were based on the contracts obtained before Singleton’s protest. So just think – if Singleton had just stayed quiet and flown under the radar, he still might be receiving set-asides.

The GAO protest decision which recommended the SBA examine Singleton’s SDVOSB program eligibility may be accessed here: Singleton_GAO_2008. The subsequent decision rendered by the SBA OHA is available here: Singleton_SBA_2008.

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Beginning on August 31, the Navy will begin providing benefits to same-sex couples. Because of federal law, however, these couples are ineligible for certain benefits such as health care and housing allowance.

As you likely know, in 2010 President Obama signed into law legislation that set conditions for the repeal of the Don’t Ask, Don’t Tell Act (DADT)(Title Ten, United States Code, Section 654). This was the official policy of the United States relating to gays serving in the military, and it prohibited military personnel from discriminating against or harassing closeted homosexual or bisexual service members or applicants, while barring openly gay, lesbian, or bisexual persons from military service. It was officially repealed effective September 20, 2011.

Earlier this year, the Department of Defense (DoD) identified family member and dependent benefits that the services can lawfully provide to same-sex partners and their families through changes in the DoD policies and regulations. To make these benefits available to same-sex partners of our service members, the Navy reviewed, and is currently modifying, all necessary instructions, notices, and MILSPERMAN (Navy Military Personnel Manual) articles; and it is conducting training to ensure a clear understanding of the benefits and documentation requirements.

In demonstrate eligibility for benefits, service members must submit a Declaration of Domestic Partnership for DEERS Enrollment (DD653) and obtain a DoD identification for their same-sex partner. If this is completed successfully, many benefits will apply to same-sex partners, including: Dependent ID cards (DD Form 1173), commissary and exchange, access to child and youth programs, access to legal assistance, access to most Family Center Programs, and emergency leave and emergency leave of absence for the military member to attend to partner emergencies. (Access the full list here).

It must be acknowledged, however, that under federal law, many “traditional” benefits still do not apply to these “untraditional” couples. Thus, the Navy cannot unilaterally extend them to gay couples. For example, a same-sex partner of a military member is not eligible for TriCare or to be reimbursed for medical payments. Also, homosexual couples are not eligible for with-dependent rate Basic Allowance for Housing. Unfortunately, some might argue that as far as benefits go, the benefits disallowed to same-sex couples are the big-ticket items.

Still, this is a big step for same-sex couples, and it is an acknowledgement of the changing and evolving policies of our military. In a few years, perhaps some of the federal laws that restrict same-sex benefits will be lifted, and the DoD will be able to follow suit.

To access the Navy’s FAQ page on same-sex benefits, go to: http://www.public.navy.mil/bupers-npc/support/dadt/Pages/default.aspx.

A debacle at the Department of Veterans Affairs (VA) information technology center in Austin, Texas reminds us how important it is to keep a copy of any document sent to the VA.

On May 24, “human error” at the information technology center resulted in the accidental deletion of 464,000 electronic data files that contained information about home loans. These records included loans, grants and applications. While some of these deleted files were recovered (approximately half of the files from March 18th to April 24), all files from the online application program from April 25 to May 24 could not be recovered.

In addressing how it will respond to the incident, the VA said that staff will be retrained to help prevent a future similar occurrence. Also, lenders, appraisers, and staff appraisal reviewers have been asked to resubmit appraisals for pending loan closings.

Fortunately, no personal identifying information was released or compromised by this incident. (Not to sound cheeky, but if anything, it was destroyed!).

In my opinion, there are two main takeaway points from this incident. The first is that in dealing with the VA, even through an electronic system, human beings are involved. And with human involvement, there is the room for human error. A wrong number can be inputted, a name misspelled, or a file deleted. Or, in this case, 464,000 files. (No one expects the VA to be perfect, but I wonder if in the near future the VA will offer an explanation for what kind of “human error” results in the accidental deletion of nearly half a million files.)

The second takeaway point is to always, always, always keep copies of everything sent to the VA. This is true for disability compensation claims (and request delivery confirmation, too!), and it’s true for other correspondence and filings as well. Sure, veterans should be able to rely on the fact that once their letter goes in the mail, or they click “save” or “submit” at their computer, their information is safe, but that’s not always the case. The system isn’t perfect, and this is one such illustration.

In May, Senator Richard Blumenthal (D-Connecticut) introduced a bill that would repeal the time limits under the GI Bill. Currently, veterans have 10 years to use their benefits under the Montgomery GI Bill, or 15 years to use their Post-9/11 GI Bill. If they fail to do so, they forfeit both the benefits and the $1,200 they paid to participate in the program.

As Senator Blumenthal stated in support of his Veterans Back to School Act, “given the changing nature of today’s job market and economy, many veterans are now choosing to go back to school and receive additional training and expertise more than a decade after separating from the military. These wise decisions should be supported for all veterans. The Veterans Back to School Act provides a simple fix to eliminate the unjust and unfair restrictions, and allows current and future generations of veterans to use these hard-earned benefits whenever it makes best sense for their futures, families and careers.”

Under the verbiage of the new bill, a veteran’s entitlement to these benefits would not end until ten years after the date he begins using the benefits. The bill also provides for funding for offices of veterans affairs at institutions of higher education. This funding will be provided only if the appropriations are available, and if at least 50 individuals at the institution are eligible for assistance.

According to the statistics on the Congressional website covering the bill, it has only a 41% chance of getting past its Congressional committee (Senate Veterans Affairs), and a scant 4% chance of being enacted.

Even as a veterans advocate, I’m not crazy about this bill. On one hand, veterans benefits are called entitlements for a reason. Veterans served our country, and they are owed a debt. This is why a Vietnam-era veteran can apply for, and receive, disability compensation benefits forty years after his active duty service. (My father did! Read about our fight for his benefits here). If that is permitted, why not permit GI Bill benefits to be used at any time after service?

On the other hand, the law specifically provides time limits for using benefits under the GI Bill. Veterans are put on notice they are to be used within a certain period of time. Moreover, that time frame is generous – a decade or more. Also, I have to wonder how many veterans this bill would actually affect, given that if a veteran hasn’t used his benefits in a decade, he probably never will. Last, while I am unfamiliar with the Congressional history of the GI Bill, I have to guess that there must have been a reason for the time limits. In particular, knowing how many veterans are eligible for education benefits within a certain period of time helps the VA estimate the monies paid out through the program.

We’ll see. There are so many different measures and programs that could help our nation’s veterans. While I appreciate the spirit behind this bill, I daresay its promotion may not be the best use of veterans advocates’ times.

The bill, as introduced to the Senate Veterans Affairs Committee, may be accessed here. If you found this blog informative, please sign up to receive it on a weekly basis on my home page. Remember to click the link sent to your email to activate your subscription!

Just in time for Memorial Day, the Stolen Valor Act was passed by Congress on May 23 to criminalize the act of lying about having earned certain military honors. It now awaits President Obama’s signature.

Not every combat award is covered, but the ones most worn by wannabe heroes will be protected once the bill becomes law. Protected are the Medal of Honor, service crosses, Silver Star, Purple Heart, and combat badges such as the Combat Infantryman’s Badge, Combat Action Badge, Combat Medical Badge, Combat Action Ribbon and Combat Action Medal. The maximum punishment under the bill will be a $100,000 fine and up to one year in jail for each offense.

This comes after the United States Supreme Court struck down a 2005 version of the Stolen Valor Act, in Alvarez v. U.S (2012). There, a man was convicted under the Stolen Valor Act for claiming he had received the Medal of Honor. In a 6-3 decision, the Supreme Court held that the Stolen Valor Act was an unconstitutional abridgment of free speech. In penning the majority opinion, Justice Kennedy expressed his concern that upholding the law would permit the government to “start a list of subjects about which false statements are punishable.”

The new Stolen Valor Act was written to be less sweeping than its predecessor, mitigating constitutional challenge by targeting fraudulent representation of military service for profit. The more narrowly-focused bill states, “whoever, with intent to obtain money, property, or other tangible benefit, fraudulently holds oneself out to be a recipient of a decoration or medal shall be fined under this title, imprisoned not more than one year, or both.” The bill covers issues ranging from lying to receive veteran or health care benefits to obtaining a government contract or getting a job reserved for a veteran. One of its co-sponsors, Nevada Congressman Joe Heck, issued a press release explaining how the new bill addressed the Supreme Court’s issues with freedom of speech. That press release can be issued here.

When I learned about the Stolen Valor Act, I was an instant supporter. As veteran small business owners know, both the Small Business Administration and the Center for Veterans Enterprise have encountered issues with individuals lying about veteran status in order to obtain federal government contracts. I hoped that the publicity surrounding the Stolen Valor Act, and its penalties, would deter individuals from misrepresenting veteran status. There’s nothing like the possibility of a jail sentence to inspire honesty.

Unfortunately, upon reading the actual bill, I realized its language criminalizes lying about medals and honors only, not veteran status in and of itself. This means that individuals who misrepresent veteran status to obtain federal government contracts are not covered by the Stolen Valor Act. I would like to know more about what the legislative history of the Stolen Valor Act says on this topic, because it was likely addressed. As the nature of the Stolen Valor Act addresses military decorations, perhaps this was beyond the scope of the bill. At any rate, the Stolen Valor Act should be celebrated for protecting the honor and integrity attached to military accolades.

For further reading, access the Stolen Valor Act here. Also, if you found this article informative, sign up for my weekly blog on my homepage. Remember to click the link sent to your email to activate your subscription!

The Department of Veterans Affairs (VA) has announced a time and place for its annual National Veterans Small Business Conference. If you’re a veteran small business owner, this may be the one event to check out this year!

The National Veterans Small Business Conference will take place from August 6th through August 8th at America’s Convention Center in St. Louis. In those three days, veteran small business owners will network with potential teaming partners, as well as rub elbows with the 300 VA procurement officials present. These officials are not only required to attend the conference, but they are mandated to conduct a follow-up meeting with at least three veteran business owners.

I attended a VetForce meeting in Washington, D.C. last week, where Tom Leney (the executive director of the Center for Veterans Enterprise) provided valuable information not included on the conference’s website. He noted that 86% of conference attendees are there to meet customers. This makes sense, as the procurement officials attending the conference have requirements that need to be met. This is an opportunity to use your elevator pitch, make connections, and make sure procurement officials know who you are and what you business has to offer.

Another reason small business owners attend is to connect with potential prime contractors, as many large businesses are sponsoring booths. Some of these companies may even be interested in teaming with small businesses on commercial opportunities. (Mr. Leney mentioned that AT&T is one such company).

Registration for the conference has not yet opened, but you can sign up to receive updates on registration at http://www.nationalveteransconference.com. As of today’s date, the only information available is the pricing list for booths, tables, and admission tickets, but Mr. Leney relayed that the list of attending procurement officials is forthcoming.

As a last note, this isn’t just a networking opportunity. It’s also a chance to check out St. Louis! As a native, I can tell you it’s the best Midwestern city there is. Here are my top reasons for why this is true:

• St. Louis City Museum – With slides, stories-high slinkys for the kids to climb through, an antique carnival, caverns, and trees to explore, this is no ordinary museum. On Washington Street, a prime spot for St. Louis nightlife.
• Forest Park – The seventh-largest urban park in the country, featuring hiking trails, a zoo, golfing, tennis courts, outdoor free plays, museums, and dining by the water
• Union Station – An old railroad station that now has shops, restaurants, and a paddle boat area.
• Lotawata Creek – The best restaurant in the entire world. Salads, steaks, and savory burgers topped with cheeses, pickles, and onions…and all of the portions are the size of your head. As an appetizer, they serve a sweet bread with honey butter you will want to stow away on the airplane ride home. Lotawata is located in O’Fallon, Illinois, but that’s a quick drive across the river.
• Missouri Botanical Gardens – Acres and acres of beautiful flowers, fountains, a Japanese tea garden, and greenhouses. This gem features jazz in the summertime (Bring your own food and wine!).
• Crown Candy Kitchen – An old fashioned malt and shake shoppe, this restaurant makes you feel like you are stepping back in time. The melts are amazing, and you can also buy candy. The one disadvantage is this was recently featured on the Travel Channel, and I hear the line’s been out the door. Good for them, bad for hungry patrons…

Hope to see you there!