GTSI suspended from federal government contracting

Company accused of taking small-business contract dollars

GTSI Corp. has been suspended from winning new government contracts but vows to fight the allegations by the Small Business Administration that it inappropriately received contract funds meant for small businesses.

“Please be assured that we will fight to restore our good name,” company president and chief executive officer Scott Friedlander said in an “open letter to our employees, customers, partners and investors” that was released Friday.


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The Washington Post broke the story Friday evening of GTSI's suspension from winning new contracts.

Post Reporter Robert O’Harrow Jr. wrote that the temporary suspension stemmed from work GTSI did as a subcontractor to small business prime contractors.

He quoted a letter from SBA to Friedlander that said, “There s 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.”

The SBA letter, according to the Post, says that GTSI was an “active participant” in a scheme to divert small business contract funds to the company.

In their open letter, GTSI said that it received the SBA letter of suspension late Friday afternoon by fax and that the action was taken “without prior discussion or notice to GTSI.”

The company says that until the SBA letter no agency had alleged that GTSI violated any small business laws or regulations.

“We appreciate your support during this time and look forward to providing you with a report on our activities as the situation warrants,” Friedlander’s letter states.

GTSI is ranked No. 59 on Washington Technology’s Top 100 list of the largest government contractors.

The company also is embroiled in a fight with Eyak Technology, which is making an unsolicited attempt to acquire GTSI.

About the Author

Nick Wakeman is the editor-in-chief of Washington Technology. Follow him on Twitter: @nick_wakeman.

Reader comments

Tue, Oct 5, 2010

SBA you need to not only suspend GTSI but also the small businesses that acted as a "Front" for them and others. I am a SDVOSB and I have refused to Front for large businesses but they always find someone who will. Suspend, Investigate and then Debar all parties is the only way to keep the bad actors out of Federal Contracting!

Tue, Oct 5, 2010 A. H. So

It would appear the SBDMWO movement social engineering is coming off the tracks. There are so many set asides that can only be achieved with the resources available only to large corporations that this is a continuing occurence. Stop the sham and call it like it is, another shaft the taxpayer game at the behest of the government.

Tue, Oct 5, 2010 M. C. Maryland

I can't help but wonder where the contracting oversight was on these disputed contracts. If a company can make money it will. If the govt. sets a rule for a set-aside, is the onus on the company looking to make a profit to determine that it can or cannot compete for subcontracts? Unless there are rules prohibiting subcontracting this way, why would anyone expect a profit driven company to self-police?

Tue, Oct 5, 2010 GSB Oklahoma

Isn't it also the Prime's responsibility (under Limitations in Subcontracting) to ensure it performs at least 50% of awarded work value by itself? Why is only a subcontractor being called on this and not the Prime who allowed this to happen - who was in fact "passing through" the work it was awarded. The latter seems to be just as serious a violation ...

Tue, Oct 5, 2010

They are as guilty as the rest of the big SI's. If you really want to dig into it, start looking into the Alaskan 8A shops and all the subsidiary branches they open under the umbrella of the main.

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