Trust, But Verify, Government Contractor Edition

Authored by Jeff White

How well do you know your teaming partners?

Do you know what government agencies they’ve worked with? What contracts they’ve held? What actions the government may have taken against them in the past?

And are you taking their word for it?

You might not recognize the risk you’re taking if you’re not verifying what you’re told. It can happen to any of us.

Even a law enforcement agency.

Case in point – Darlene Mathis-Gardner, and Systems Design, Inc. Ms. Gardner is in federal court this week, pleading guilty to fraud, where, the Washington Examiner reports, she “faces up to five years in prison and a $250,000 fine” for lying to the government in a proposal.

Systems Design, a Georgetown-based interior decorator, is no fly-by-night operation. They won their first government contract a decade ago, and have, to date, won $9.7 million in government business – and that doesn’t count a $5.4 million contract that was rescinded last year before work began (more on that in a minute).

This time around, Systems Design won a $1.3 million contract to decorate new offices for the Immigration and Customs Enforcement (ICE) agency. In their bid, Legal Times notes, “Mathis-Gardner and her co-conspirators passed off independent contractors as the company’s employees, submitted false information about their background and qualifications, and created fictitious documentation of the company’s past performance in order to convince government officials that they were qualified to perform the work.”

She reportedly hired someone with no government experience to prepare the bid. Following Mathis-Gardner’s instructions, this person (court papers don’t identify them by name) then wrote a proposal that overstated the qualifications of employees, claimed they had worked for the company for years when none had, and, best of all, created fake invoices to demonstrate past performance.

The examiner reports, “One fake invoice falsely claimed that the company had done about $1.25 million in work for Fannie Mae. Another bogus invoice said the company was the prime contractor for a $1.1 million District of Columbia Department of Parks and Recreation project.”

The proposal then went to ICE – a law enforcement agency, of all things – which found no fault with it.

We shouldn’t be too hard on ICE, though. It would be easy to be fooled by an operation like Systems Design. USASpending shows $9.7 million worth of federal payments to the company since 2001. Gardner-Mathis herself has been profiled in the Washington Post, where she talked about how her interior design work for the Department of Justice “helped reduce tension and enabled people to communicate better.” Communicate, apparently, about her attempts to defraud the government.

I wonder if the prosecutors who negotiated her guilty plea like the blinds she chose for them.

Things began to unravel for Systems Design last year, when, the AP notes, the company lost a $5.4 million no-bid contract that would have had it designing stemware for the State Department (and yes, let’s all pause to note that the government in danger of shutting down over budget battles wanted to spend $5.4 million on custom wine glasses for embassies – seriously, guys, I have a Costco card you can borrow…). The contract was withdrawn when competing companies objected because Systems Design didn’t actually have any experience designing stemware, and planned to outsource all of the work to a Swedish firm.

So, to sum up – we have here a small business with a ten-year track record of government work, a high public profile including media coverage most of us would love to get, and a foothold in multiple federal agencies. It looks like an ideal partner, doesn’t it?

And yet, they’re losing contracts and the founder may be going to prison for fraud.

So how well do you know your partners? Have you taken their word for it on their past performance? With oversight increasing daily, you can’t afford to trust without verifying. One business relationship with a Systems Design can pull you into investigations that will taint your company’s image, even if you’ve done nothing wrong.

That’s why we’ve built the contracting industry’s only Supplier Verification System, a business background check that identifies teaming partners you can trust – and, just as vitally, identifies your business as a trustworthy partner.

Check it out today. Verification is free for premium members, and more valuable than a Swedish-made champagne flute embossed with the State Department logo.

Jeff White is Deltek’s VP, GovWin, the network that helps government contractors win new business every day. He can be reached at [email protected], or follow him on Twitter @Jeff_White1347.

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