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Contractors use shell games to hide owners, cheat taxpayers

164 pointsby black6over 5 years ago

9 comments

papedaover 5 years ago
It bugs me that so much more public and media ire is directed toward tech companies than defense contractors when the latter industry is of comparable size, way more opaque, and dominated by very very old companies [1] with excellent lobbying.<p>I understand that people have far less personal interaction with defense contractors. But hey, it’s your tax dollars.<p>[1] <a href="https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;List_of_defense_contractors" rel="nofollow">https:&#x2F;&#x2F;en.m.wikipedia.org&#x2F;wiki&#x2F;List_of_defense_contractors</a>
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rdtscover 5 years ago
&gt; ... abusing programs intended for small businesses owned by “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals;”<p>Yap, saw that while bidding on projects. So and so would find some relative or friend who matches one or more of those categories and then claim they were the owner on paper to get the contract.<p>Some schemes were running for 20 some years. For instance case 30 running since 1999, awarded $52M.<p>In case 18, they received over $200M. That&#x27;s a lot of money wasted.<p>But good thing they were caught, surely they will receive harsh sentences?<p>&gt; POGO determined is likely a recent case involving a Kansas City, Missouri-area construction company owner who was sentenced to 18 months in prison.<p>No, not really. Just 1.5 years after stealing $13.7 million.<p>There are more instances that are shady but harder to track, such as the government entity writing the specs to match exactly one company&#x27;s product. Let&#x27;s just say by a company owned by their college buddy. So on paper they may be lots of bids, but surprise, only this one company ends up matching up.
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joncraneover 5 years ago
Just want to chime in and say the vast majority of people working on government contracts fall into two categories:<p>1. Hard working folks trying to do the right thing (approx 20-50% of the people)<p>2. People who are coasting and nominally meet whatever requirement for the position (some combination of experience and certification usually) who can barely get the job done, but they are friendly and don&#x27;t cause trouble (by getting in the way of the people who actually DO get something done) so no one bothers them and they get to collect a paycheck. (50-80%)<p>Many from category one turn into category 2 as time goes by, because #2 is actually the optimal strategy.<p>Most companies also tolerate #2 because the client isn&#x27;t complaining and they are making their cut on the person&#x27;s hourly rate. So everyone&#x27;s more or less happy and life goes on.<p>Also note that the distribution of people doesn&#x27;t significantly vary based on whether the employer is SDVOSB&#x2F;WOSB&#x2F;whatever. However, the largest companies (like Accenture) do tend to have a higher proportion of #2s, but also a higher proportion of extremely charismatic &quot;relationship managers&quot; who flatter, gladhand, and overall stroke the client representative&#x27;s egos and fantasies to cover up for it.<p>The government contracting business has plenty of well-meaning, hard working professionals in it. But there&#x27;s also a lot of not so much waste, fraud, and abuse, but &quot;skating by&quot; going on as well.<p>The main reason is due to the obstreperous rules, bureaucracy, stagnation, and old tech, the jobs pay above market AND tend to provide excellent work&#x2F;life balance.<p>Source: I&#x27;ve been a gov&#x27;t employee, then worked in contracting, went to private sector, now back in contracting. I&#x27;d like to think I&#x27;m in category 1, and I have many, many days when I am extremely jealous of my colleagues in category 2, who make just as much money as I do but do about 20% of the work.<p>One last edit: I find it funny that one SDVOSB owner was considered &quot;Service Disabled&quot; because he tore his ACL playing football for Navy. But I&#x27;m a little bit in the &quot;don&#x27;t hate the player, hate the game&quot; camp on that one. I&#x27;d start a company, too, in that position. Doesn&#x27;t mean I&#x27;m doing shitty work, just means it&#x27;s easier to award me the work. They are two different things.
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jessaustinover 5 years ago
DoD doesn&#x27;t use the resources it receives wisely. Therefore, it should receive fewer resources.<p>Unfortunately, what will happen instead is that DoD will only buy from giant firms on an &quot;approved&quot; list, which is exactly what those giant firms have paid their lobbyists to bring about.
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PeterisPover 5 years ago
The whole problem is caused by ridiculous policies such as explicit advantages for &quot;small businesses owned by “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals&quot;.<p>It&#x27;s obvious why they&#x27;re passed (and would be nearly impossible to repeal), because it&#x27;s a useful PR trick that sounds good and attractive to the voters. However, that&#x27;s bullshit - it does not matter by whom the business is &#x27;owned&#x27; (because actual control and benefit does not map cleanly to legal ownership), if you want to subsidize a particular group of people, well, just give them an appropriate amount cash directly, or give advantages to the particular “service-disabled veterans, women, minorities, or economically and socially disadvantaged individuals&quot; themselves, but you definitely should have the businesses still compete based on proper merits instead of legalizing advantages for ticking arbitrary boxes, which only invites abuse such as described in this article.
munk-aover 5 years ago
It&#x27;s hilarious that this issue hurting the US is entirely and wholly made by the US. The various ridiculous ways you can mask corporate ownership in the US all come straight out of the mass of company control, ownership and revenue disbursement that have evolved over time - it also hits common folk too, but it&#x27;s amusing that the DoD gets hit by it so hard.
morninglightover 5 years ago
Speaking of taxes, has anyone been able to download the instructions for the Federal 1040 form? the website is: <a href="https:&#x2F;&#x2F;www.irs.gov&#x2F;forms-instructions" rel="nofollow">https:&#x2F;&#x2F;www.irs.gov&#x2F;forms-instructions</a><p>but the downloadable &quot;Instructions for Form 1040&quot; pdf is for tax year 2018. Can anyone find the download for tax year 2019?
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vsaretoover 5 years ago
I wonder how many of these schemes will be used when CMMC certification is required by DOD.
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RALaBargeover 5 years ago
In other news today, water is wet