Two small businesses suspended in set-aside probe

The Small Business Administration has suspended two more firms in its expanding probe of small business contracts that might be illegally passed through to large companies.

On Thursday, SBA announced the suspension of EG Solutions and MultimaxArray FirstSource based on allegations the firms misrepresented themselves on a large Homeland Security Department information technology contract.

Both firms won multimillion-dollar task orders, reserved exclusively for small businesses, on DHS' $3 billion FirstSource contract for IT hardware, software and services. But, according to letters SBA sent to the firms on Thursday, much of the contract work actually was passed through to a larger company.

"Further evidence shows that the subcontractor in fact performed most if not all of the work required to be performed in connection with the subject contract opportunities," SBA suspension and debarment official Michael Chodos wrote. "There is also evidence that [MultimaxArray FirstSource] and its subcontractor attempted to conceal the nature of this relationship from the government and their competitors, after concerns were raised about MAF and its subcontractor's conduct."

While the letters do not mention the subcontractor by name, in October SBA suspended GTSI Corp., a systems integrator in Herndon, Va., based on allegations it was performing virtually all the work on a $165 million delivery order that was awarded to MultimaxArray. GTSI also served as a subcontractor to EG Solutions on the FirstSource contract. SBA later allowed GTSI to resume most of its government work pending the results of an investigation and subject to strict oversight criteria.

Chodos wrote there is evidence EG Solutions and MultimaxArray also "committed fraud or a criminal offense in obtaining and attempting to obtain contracts and in its performance of those contracts, and that there is adequate evidence of a lack of business integrity or business honesty."

A spokesman for MultimaxArray did not respond to a request for comment on Friday. The firm is a joint venture of Multimax and Array Information Technology.

EG Solutions, based in Dulles, Va., is a subsidiary of Eyak Corp., an Alaska native corporation. In a statement, Eyak said it takes "seriously the obligation to provide the federal government with quality contracting services in an ethical and responsible manner."

The two firms have 30 days to formally respond to the suspension.