A company owned and run by South Carolina’s Democratic candidate for governor was blacklisted as a contractor for the Department of Veterans Affairs following allegations that he was selling his veteran status to corporations so they could tap into federal contracting dollars intended to help disabled vets.
James Smith works as a state legislator and lawyer, and also runs the Congaree Group, which has received millions of dollars in federal government contracts. The company operates out of Smith’s law firm suite, and he once told the VA he was its only employee.
On paper, the company has done everything from manufacturing pharmaceuticals to mopping floors and from parking cars to conducting advanced mathematical analysis.
On May 17, VA officials arrived for a surprise inspection, VA deputy assistant Secretary James Hutton told The Daily Caller News Foundation. The purpose was to find out if Smith was running a middleman company used to win lucrative federal contracts earmarked for disabled veterans, then passing all the work off to non-veteran companies in exchange for a cut for himself. Such so-called rent-a-vet scams are forbidden.
Facts are stubborn things; and whatever may be our wishes, our inclinations, or the dictates of our passions, they cannot alter the state of facts and evidence. - John Adams
I suspect this is quite common, and not just for veteran set aside, but for other small business set asides as well like minority owned and women owned businesses.
When a smaller company gets small business status with the federal government, They can compete for contracts that are set aside just for small businesses without having the big guys for competitors. But the status is only supposed to be a “hand up” to help the company get established; after seven years the special status comes to an end. The small business is supposed to have grown up during that time and be able to compete on its on legs.
When I was still in service one of the companies we used in Texas for computer support was a minority owned Small business coming to the end of its special status. They were so frantic about this that they actually tried to sell themselves to an Alaskan company owned by some Native American woman I think. This of course would’ve been simply a paper arrangement. I believe the contracting officers squelch that particular effort but I’ll bet it still happens in other cases, Particularly in non-DOD departments.
