GTSI suspended from federal government contracting

GTSI Corp. has been suspended from winning new government contracts but vows to fight the allegations by the Small Business Administration that it inappropriately received contract funds meant for small businesses.

“Please be assured that we will fight to restore our good name,” company president and chief executive officer Scott Friedlander said in an “open letter to our employees, customers, partners and investors” that was released Friday.

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The Washington Post broke the story Friday evening of GTSI's suspension from winning new contracts.

Post Reporter Robert O’Harrow Jr. wrote that the temporary suspension stemmed from work GTSI did as a subcontractor to small business prime contractors.

He quoted a letter from SBA to Friedlander that said, “There s evidence that GTSI's prime contractors had little to no involvement in the performance of contracts, in direct contravention of all applicable laws and regulations regarding the award of small business contracts.”

The SBA letter, according to the Post, says that GTSI was an “active participant” in a scheme to divert small business contract funds to the company.

In their open letter, GTSI said that it received the SBA letter of suspension late Friday afternoon by fax and that the action was taken “without prior discussion or notice to GTSI.”

The company says that until the SBA letter no agency had alleged that GTSI violated any small business laws or regulations.

“We appreciate your support during this time and look forward to providing you with a report on our activities as the situation warrants,” Friedlander’s letter states.

GTSI is ranked No. 59 on Washington Technology’s Top 100 list of the largest government contractors.

The company also is embroiled in a fight with Eyak Technology, which is making an unsolicited attempt to acquire GTSI.