The Department of Defense awarded nearly $30 million in stimulus contracts to six companies while they were under federal criminal investigation on suspicion of defrauding the government.
According to Air Force documents, the companies claimed to be small, minority-owned businesses, which allowed them to gain special preference in bidding for government contracts. But investigators found that they were all part of a larger minority-owned enterprise in Southern California, making them ineligible for the contracts.
The Air Force and the Army awarded the companies 112 stimulus projects at U.S. military bases, federal contracting records show [2] (27MB Microsoft Excel File). It wasn’t until Sept. 23 – more than a year after the criminal investigation started – that the Air Force suspended the firms from receiving new government contracts.
Federal rules allow agencies to terminate contracts when it’s in the government’s interest. But neither military branch plans to terminate the stimulus contracts awarded to the suspended companies as long as they are performing satisfactorily, said Air Force spokeswoman Lt. Col. Ann Stefanek and Army spokesman Maj. Jimmie Cummings.
