CBP faulted for no-bid contract to Alaskan tribe

CBP faulted for no-bid contract to Alaskan tribe    U.S. Customs and Border Protection improperly awarded a $475 million, no-bid contract in 2003 to a native Alaskan company to maintain about 10,000 non-intrusive inspection machines and other systems, the Department of Homeland Security’s inspector general said in a report issued Tuesday and first reported by the Washington Post .
   CBP touted the contract award to Chenega Technology Services as the largest ever made by a civilian agency under the Small Business Administration's 8(a) program to help small disadvantaged businesses compete for federal contracts. But Inspector General Richard Skinner said CBP failed to comply with federal regulations because Chenega exceeded the revenue limits to qualify for sole-source contract under small business set-aside rules.
   Businesses with up to $32 million in revenue are allowed to compete for those types of contracts. Chenega's revenue exceeded $170 million. Alaskan Native corporations have favored status under federal contracting laws.
   'CBP's use of an incorrect industry classification that enabled a sole source award likely did not provide the government the best value' and denied small business the opportunity to compete for the contract, the report said.
   The IG's office faulted CBP for poor contract oversight procedures and for then subcontracting the majority of work to large prime contractors such as SAIC, General Dynamics and L-3 Communications.
   Federal regulations require that the small business contractor be responsible for at least 50 percent of the personnel costs under the contract so that the work isn't simply farmed out to bigger companies.
   The IG said it was unclear whether CBP directed Chenega to subcontract with specific companies. At the time the prime contract was awarded 21 small businesses that had been doing the work were displaced.
   Also, Chenega's use of a non-approved purchasing system meant that CBP had to review subcontracts and task orders and that it did not obtain the reduced administrative burden that replacing numerous separate contracts with a national prime integration contract was intended to provide, the IG report said.
   Chenega has performed about $141 million worth of services so far. The contract calls for the company to integrate the maintenance schedules and dispatch operations of original equipment manufactures and others who service x-ray and gamma-ray scanners, radiation detectors and identifiers, video surveillance systems, fiber optic scopes, laser range finders, vapor tracers and other security devices used by the agency.