DOD Issued a $7 Million Cloud Support Contract To a Company With One Employee


This is a weird form of crony capitalism, but set aside cronyism is something that happens all the time in Washingtonworld.

It’s strange to think that the government engages in this sort of preferential treatment for certain firms just because of the ethnicity or gender of the person who owns the business.

(From NextGov)

As Eagle Harbor Solutions notes on its website, federal contracting offices can award sole-source contracts to “Alaska Native-owned 8(a) companies for a value of up to $22 million without the need for a justification and approval.” Sole-source justifications are common, especially in the Defense Department, and are used to publicly explain why an agency did not engage in a full and open competition.

Contracting experts told Nextgov the Defense Department’s use of an ANC 8(a) company essentially sacrifices transparency for speed. Instead of hosting a full and open competition for a contractor to provide support services on the cloud contract, which could take months or more, the Defense Department can issue the contract with no competition in hopes of moving faster.

“Even though the process of awarding this looks strange and curious, it does look like speed is the real reason,” said Alex Rossino, senior principal research analyst at  Deltek, which conducts federal market research. “It is weird. Ideally, you’d want someone with a demonstrated track record. The question is: What’s the impact going to be moving forward?”

The Government Accountability Office has periodically audited the government’s use ofANCs, including problems with oversight and lax justifications. In 2014, 344 ANC-owned firms generated $4 billion in revenue from federal agencies, according to GAO.

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