Suspended. That was the crux of a fax sent to GTSI Corp., one of the government’s largest contractors, at 4:14 Friday afternoon. What’s behind this decision? Why did it happen? What’s next? And what does this action mean? It’s anybody’s guess.
“We’re still kind of digging into the process, because it happens so rarely,” Nick Wakeman, editor of Washington Technology magazine said.
The SBA’s suspension essentially prevents GTSI from receiving any new work, Wakeman said.
The Washington Post broke the news, reporting that the SBA took issue with work GTSI did as a subcontractor for small businesses that were the prime contractors on various government contracts.
“There is evidence that GTSI’s prime contractors had little to no involvement in the performance of contracts, in direct contravention of all applicable laws and regulations regarding the award of small business contracts,” an SBA official wrote in a letter to GTSI’s chief executive, Scott W. Friedlander. “The evidence shows that GTSI was an active participant in a scheme that resulted in contracts set-aside for small businesses being awarded to ineligible contractors.”
“The letter mentions the first-source contract with DHS as an example, where GTSI is a subcontractor to a small business. SBA is saying the majority of the business actually went to GTSI, that GTSI had this scheme in place where GTSI employees had email addresses for the small business prime,” Wakeman said. “Basically they’re saying these primes were just fronts.”
“My understanding is in 30 days, they’ll be some sort of hearing on possibly going toward debarment,” Wakeman said. “GTSI will be able to at least defend itself to SBA, and then we’ll see where they go from there.”
You can find more of Wakeman’s analysis on the situation here.