http://oversight.house.gov/release/issa-releases-report-finding-questionable-contracting-practices-at-irs/
Key Report Findings:
In 2012, Strong Castle/Signet Computers was named the Small Business Prime Contractor of the Year by the Treasury Department
Prior to January 2012, when Braulio Castillo purchased Signet/Strong Castle, the business had $250,000 in annual revenue. In just six months, it won over $500 million of potential awards – overwhelmingly these awards came from the IRS. (Section IX(C), p. 94).
Strong Castle’s business strategy revolved around preference contracting. Strong Castle secured the designation of a Service-Disabled Veteran-Owned Small Business as a result of an injury its owner suffered at a military prep school. He was able to get this designation despite the fact that he never actively served as a member of the armed services, he played college football after the injury, and twenty-seven years went by before he sought the designation as a disabled veteran. Castillo sought the disabled veteran designation only months before he purchased the company and was so focused on its ability to help secure contracts that he didn’t even know it would entitle him a $450 monthly payment.
Strong Castle gained a competitive edge by winning a designation from the Small Business Administration as a HUBzone contractor Strong Castle did this by (1) hiring full time college students from Catholic University to fulfill the 35% requirement; (2) falsely dubbing more senior employees who lived in other areas as “consultants” so that they would not harm the 35% employee threshold minimum; and (3) although the company opened a new “headquarters” office in Leesburg, Virginia, it also opened a small office in Chinatown that it said was its “principal office.” One student employee was fired after Strong Castle discovered she did not live in the HUBzone area. Another student supposedly worked 9 hours at the office the same day he had 4 1Ž2 hours of final exams. Strong Castle said this was simply a discrepancy in its records (pp. 25-58).
SBA revoked Strong Castle’s HUBzone designation after information about false claims were brought to its attention by the Oversight Committee.
Student employees interviewed by the Committee had only limited knowledge of what the company did or that it even had contracts with the IRS.
In February 2013, Castillo told CNSnews that he had no personal relationship with anyone at the IRS.
In an interview this month with Oversight Committee investigators, Castillo acknowledged that he has had a longstanding relationship with IRS Deputy Director, Enterprise Networks and Tier Systems Support Gregory Roseman since 2003 (p. 56).
The Committee reviewed over 350 text messages between Roseman and Castillo. The messages show a relationship far closer than an arms-length relationship between a contractor and government contracting customer. Text messages include grossly inappropriate homophobic slurs that underscore a problematically close relationship (p. 56). Castillo said months of records for other text messages, at critical contract junctures, were accidentally deleted and unavailable.
The Director of the IRS’s Office of IT Acquisition told investigators that he would cancel a $266 million IBM blanket purchase agreement made with Strong Castle if it was shown that it had intentionally misrepresented facts about its HUBzone certification. The contract had been described at the biggest contract put out by IRS in 15 years. Despite SBA revoking Strong Castle’s HUBzone status, IRS now says that cancelling the contract would be too disruptive and doesn’t currently plan to do so (p. 148).
While IRS has asked TIGTA to investigate, no discipline has been planned or announced for the IRS contracting officials whose conduct was criticized by other IRS employees. Meanwhile, taxpayers remain on the hook for the costs of these contracts given to a vendor with questionable reliability.
Read the report here. http://1.usa.gov/11Kv4Cr
One hour 59 minutes
“The IRS Contracts with Strong Castle, Inc.” Part I
http://www.youtube.com/watch?v=n3WBpk8A_-Y
Issa Releases Report Finding Questionable Contracting Practices at IRS
Read the report here. http://1.usa.gov/11Kv4Cr
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It is not just the IRS or Strong Castle that are in violation of procurement rules/regulations. Every agency ignores and manipulates the system for personal gain.
Congresswoman Tammy Duckworth eviscerates Castillo for taking advantage of VA set-aside rules based on having twisted his ankle while playing football at a US military prep school:
We may not agree with Duckworth’s politics, but every conservative can applaud this epic smack-down of a Kerry-esque slimeball who benefited at the expense of true veteran heros.