We’d like to think that the continual flow of fraud-related stories emanating from our Federal procurement system is committed by a tiny minority of rogue Federal employees and greedy contractors who have taken advantage of weak internal controls and lax oversight, and that they are not at all representative of the vast majority of procurement activity that takes place every single working day, executed by people and companies who adhere to the highest levels of honor and integrity.

We’d like to think so, but we’re losing confidence in that point of view. Our perspective is being eroded by the flood of stories like the New Orleans levees giving way to Hurricane Katrina.

Let us recite the litany of such stories that are currently sitting in our in-box, polluting our Pollyanna point of view like an oil spill in the Gulf of Mexico.

The Federal Times reported—

A once-prominent Northern Virginia technology contractor is facing bribery charges accusing the firm of paying millions of dollars in kickbacks for contract work and using bogus references to gain entry into a government set-aside program — the latest development in the largest bid-rigging case in U.S. history.

Prosecutors said the company, Nova Datacom LLC, worked with former Army Corps of Engineers contracting official Kerry Khan, who agreed to steer business to the firm. Khan, who has pleaded guilty and awaits sentencing, received $7.5 million ‘directly and indirectly’ from Nova DataCom, according to charges.

Nova Datacom also submitted false information on educational backgrounds and experience in its application to the Small Business Administration in 2007 to win certification as an 8(a) small disadvantaged business and qualify for set-aside contracts, according to charging papers…

In outlining the case against Khan, prosecutors said the investigation involves more than $30 million in bribes, as well as plans to steer a contract worth more than $1 billion. …

Separately, prosecutors filed bribery and other charges against Min Jung Cho, who is listed in charging papers as the president of Nova DataCom and as the sister of the company’s chief technology officer, Alex Cho. Court papers show Alex Cho began cooperating in the investigation about two years ago.

While the Nova DataCom website isn’t active anymore, Internet archives show the company’s site included a section on corporate citizenship saying the business was ‘committed to holding ourselves to a higher standard of integrity and accountability.’ The company’s site also included a host of awards and recognitions, including a listing by the Washington Business Journal in 2010 for the top 50 fastest-growing companies.

In subsequent story, the Federal Times told its readers that Kerry Khan, “the mastermind of the largest bid-rigging scam in the history of federal contracting,” had “millions of dollars, mistresses in three states and a taste for high-end cars and liquor.” The story reported—

In all, Khan and his associates had illegally pocketed more than $30 million in kickbacks and bribes over almost five years. When authorities finally arrested Khan in October 2011, he had been planning an even bigger scheme to steer a nearly $1 billion federal contract. …

Other contractors — some real, others little more than front organizations — were involved, too, according to court records. Harold Babb, former director of contracts for Eyak Technology, has received more than seven years in prison for his dealings with Nova DataCom and Khan.

Here is how it generally worked: Contractors involved in the scheme submitted bogus invoices, which the Army Corps — with Khan’s help — paid out. In exchange, the money from those invoices went to payoffs and kickbacks through various businesses…

The kickback scheme involved a big Army Corps contract known as TIGER, for Technology for Infrastructure, Geospatial and Environmental Requirements. Until their arrests in fall 2011, Khan and others planned to steer another nearly $1 billion contract known as CORES, for Contingency Operations Readiness Engineering and Support, prosecutors said. …

By summer 2011, authorities had begun monitoring Khan’s cellphone. That is when they heard him discussing plans to make a $56,105 payment for a 2012 BMW 650i for a co-worker, who had agreed to chair a contract selection panel on a nearly $1 billion procurement Khan aimed to steer to Nova DataCom, according to records. …

How did this massive scheme, involving multiple conspirators and multiple contractors, work? The Federal Times reported—

But despite recent developments in the case, none of the newly filed documents shed light on one big unanswered question: How could such a scam have grown so big, so fast, without anyone noticing?

[U.S. Attorney for the District of Columbia] Machen declined to comment on specifics but said all contract fraud cases expose a lack of internal controls, and the Khan case is no different. …

Scott Amey, general counsel for the nonpartisan Project On Government Oversight, a watchdog group, said the case exposes a glaring lack of adequate administration and oversight of federal contracts. ‘The government’s limited access to contractor cost or pricing data and failure to conduct robust audits are part of the problem,’ he said. ‘We have to provide one or both of those tools at the pre- and post-award stages to ensure that taxpayers are not fleeced.’

In unrelated news, Federal contractor CDW-Government (CDW-G) agreed to pay $5.66 million “to resolve allegations” that it submitted false claims to the General Services Administration (GSA). Here’s a link to the DOJ press release. The DOJ press release stated—

The settlement resolves allegations that, during the period 1999 to 2011, CDW-G improperly charged government purchasers for shipping, sold products to the United States that were manufactured in China and other countries that are prohibited by the Trade Agreements Act, and underreported sales in order to avoid paying GSA its ‘Industrial Funding Fee,’ a fee based on total contract sales that is designed to cover GSA’s costs of contract administration. …

The allegations arose from a lawsuit filed in a federal court in East Saint Louis, Ill., under the qui tam or whistleblower provisions of the False Claims Act. Those provisions allow private individuals known as ‘relators’ to sue on behalf of the United States and to share in the proceeds of any settlement or judgment that may result. The relator in this case, former CDW-G sales representative Joe Liotine, will receive $1,585,892.56 of the total recovery as a statutory award. The relator may also be entitled to receive additional amounts from the defendant for attorneys’ fees and costs.

And speaking of false claims, here’s a link to another DOJ press release, announcing that—

Alabama-based Caddell Construction has agreed to pay to the United States $1,150,000 to settle allegations that it violated the False Claims Act by falsely reporting to the Army Corps of Engineers that it hired and mentored a Native American-owned company to work on construction projects at Fort Bragg, N.C., and Fort Campbell, Ky.

The press release provided additional details, which included the following—

The Army Corps contracted with Caddell between 2003 and 2005 to build barracks at the two bases. As part of the contracts, Caddell represented that it would hire and mentor Mountain Chief Management Services, a Native American-owned company, under the Department of Defense’s Mentor-Protégé and Indian Incentive Programs. The Mentor-Protégé Program reimburses companies for the time and cost of mentoring small disadvantaged businesses, while the Indian Incentive Program provides a rebate to contractors for subcontracting with Native American-owned businesses.

The United States alleged that from April 2003 to March 2005, Caddell falsely represented in its invoices and supporting documents that it was mentoring Mountain Chief and that Mountain Chief was performing work on the construction projects. According to the government, Mountain Chief allegedly was merely a pass-through entity used by Caddell to claim payments under the two programs, and didn’t perform the work or receive the mentoring services for which Caddell received payment.

Speaking of misrepresentation and false claims, here’s another announcement.

U.S. Attorney William J. Hochul, Jr. announced today that Raymond Testa, 60, of Rochester, N.Y., and Gerald Testa, 55, of Ontario, N.Y., were arrested and charged by criminal complaint with major fraud against the United States. The charge carries a maximum penalty of 10 years in prison, a $1,000,000 fine or both.

Assistant U.S. Attorney Craig R. Gestring, who is handling the case, stated that according to the complaint, the defendants own and operate Testa Construction Inc. Starting in approximately 2008, the brothers started a second business and represented it to be a Service-Disabled Veteran Owned Small Business, when in fact it was not. In order to qualify as a Service-Disabled Veteran Owned Small Business, one must be a veteran with a service connected disability. The complaint further alleges that the defendants applied for and received government contracts from the Department of Veteran Affairs, which were set aside for the Service-Disabled Veteran Owned Small Business program, totaling approximately $13,000,000, funding that they would not otherwise be entitled to.

But let’s be clear: fraud is found everywhere in the Federal procurement system and throughout government operations. Take Brandon Gauss, age 38, of Preston, Maryland, who was discussed in yet another DOJ announcement. According to the announcement—

Gauss … pleaded guilty late yesterday to theft of government property from the Goddard Space Flight Center, part of the National Aeronautics and Space Administration (NASA). …

According to his plea agreement, Gauss was a contract employee at NASA.  As an engineering technician at the Goddard Space Flight Center, he had access to tools and other property NASA owned.  From October 2011 through November 2012, Gauss stole tools and aluminum scaffolding belonging to the government, which he sold to pawn shops for cash. Gauss made over 60 visits to pawn shops throughout Maryland, including Baltimore, Anne Arundel and Queen Anne Counties, and received at least $16,974.  The government has recovered some of the items, worth at least $29,736. Gauss admits that he owes the government at least $11,574.35, the money he received from selling the stolen materials the government has been unable to recover.

One more: here’s a story about the “Godfather at Camp Pendleton,” a DOD employee who was “arrested after extorting a $10,000 bribe.” The story reported—

The $10,000 was the first payment of a $40,000 bribe that was intended to influence who got a $4 million flooring contract at the Marine base, FBI Special Agent Darrell Foxworth said in a statement. Natividad “Nate” Lara Cervantes, 64, of San Diego, was taken into custody Thursday after the cooperating witness handed him the $10,000 in an envelope after the two met at a cigar lounge on Miramar Road...

Cervantes threw the manila envelope on the ground as federal agents approached … Cervantes supervises the Construction and Service Contracts Inspection Branch at Camp Pendleton, where he managed construction contracts, the complaint said.

In November, the cooperating witness told an FBI agent that Cervantes was extorting bribes going back to September 2008. … Cervantes said he ‘normally demands 3 percent of the value of the contract,’ but the witness could not pay that much. The witness made two $2,500 payments to Cervantes.

The witness told an FBI agent that Cervantes once said, ‘I am referred to as the ‘Godfather’ at Camp Pendleton.’ Cervantes said he controlled what is called the ‘laydown’ area on the base, where contractors set up their trailers, and determined what contractors got the best spots. …

At one point, Cervantes asked that his granddaughter be hired as a full-time administrative assistant, the witness said. …The witness also said Cervantes asked him to do free work on his downtown San Diego condominium.

We could continue reciting these sad stories of seemingly systemic fraud.

We won’t mention the recently unsealed FCA claim against Agave Bio Systems. We won’t discuss the former U.S. Army Captain who was just sentenced to serve 23 months in prison “for conspiracy to accept thousands of dollars in gratuities from contractors during his deployment to Baghdad, Iraq.” We won’t delve into the story of the “former contract employee” of the DOD who was recently sentenced to serve 35 months in prison for “his participation in a bribery and money laundering scheme arising from corruption in the award of defense contracts at Camp Arifjan.” (We’ve more than covered the cesspool of corruption that was Camp Arifjan—just type “Arifjan” into the site’s keyword search feature.)

It’s not just us. Even the mainstream source Defense Industrial Daily stated, “Sadly, this type of headline keeps coming.”

And as you may know, we normally don’t report the multitude of corruption cases that fall under the heading of healthcare fraud. If we reported those, we’d never, ever, report on anything else.

Seriously, WTF? When will our civil service and military leadership wake up and clamp down on internal controls and oversight? We are personally sick of reading, and reporting, the never-ending cascade of fraud-related stories coming out of our Federal operations and the procurement system.

Stop the insanity, someone.