Published on HamptonRoads.com | PilotOnline.com ( <http://hamptonroads.com/> http://hamptonroads.com) Memo questions small-business contracts to Blackwater arm WASHINGTON Federal investigators are raising new questions about whether an affiliate of the controversial security firm Blackwater Worldwide should have received more than $100 million in federal contracts set aside for small businesses. In a memorandum made public Monday, internal investigators for the Small Business Administration said the agency "did not adequately explain" how it concluded that Blackwater falls within size limits for small-business contracts. The SBA also disregarded evidence in its own records suggesting that "independent contractors" hired by Blackwater to do security work for the State Department in Iraq were actually under Blackwater's supervision, the memo charged. The workers' status is critical because federal law generally limits small-business contracts to firms with fewer than 1,500 workers. Blackwater would be over that limit if the workers were classed as employees of the firm rather than independent contractors. The memo, written by Glenn Harris, counsel to SBA inspector general Eric Thorsen, refers to "potential misrepresentations by Blackwater" but does not accuse the Moyock, N.C.-based firm of breaking federal laws or improperly obtaining contracts. It was unclear Monday how or whether the SBA will follow up on the findings. Anne Tyrrell, a Blackwater spokeswoman, called the SBA memo "unnecessarily speculative." She released a statement asserting that everyone working in Iraq on government contracts with Blackwater is "under the direct operational control of the United States government" and not working for Blackwater. Two of Blackwater's competitors appealed the SBA's decision, and in December 2006, the agency dismissed that appeal. In an e-mail to The Virginian-Pilot, SBA spokeswoman Christine Mangi said the SBA considers numerous factors in determining whether an individual is an employee or a contractor. "No one factor is more important than another," Mangi wrote. The agency cannot reopen that decision because it was the subject of an appeal, she added. The memo released Monday stems from questions first raised in a letter to the SBA last spring from Rep. Henry Waxman, chairman of the House Oversight and Government Reform Committee and a persistent Blackwater critic. In a statement released Monday, Waxman said it appears that Blackwater "misled contracting officials who in turn ignored blatant warning signs. It is deplorable that no one ever looked out for the interests of the federal taxpayer." Federal procurement records show that since 2000, Blackwater and affiliated firms have received more than $144 million worth of contracts set aside for small businesses, Waxman has charged. One Blackwater affiliate, Presidential Airways, was the focus of the SBA inquiry triggered by Waxman. Waxman's staffers released the SBA memo along with a cover letter in which they said the agency's findings raise "serious concerns about whether Blackwater made false statements about its small business status." They added that under federal law, "misrepresenting a business as a small business concern in order to win a federal contract is a criminal offense punishable by a $500,000 fine and up to ten years in prison" as well as "suspension and debarment" from future federal contracts. Dale Eisman, (703) 913-9872, <mailto:[EMAIL PROTECTED]> [EMAIL PROTECTED] [1] _____ Source URL (retrieved on 07/29/2008 - 22:11): <http://hamptonroads.com/2008/07/memo-questions-smallbusiness-contracts-blac kwater-arm> http://hamptonroads.com/2008/07/memo-questions-smallbusiness-contracts-black water-arm Links: [1] mailto:dale. <mailto:[EMAIL PROTECTED]> [EMAIL PROTECTED] [Non-text portions of this message have been removed] ------------------------------------ -------------------------- Want to discuss this topic? Head on over to our discussion list, [EMAIL PROTECTED] -------------------------- Brooks Isoldi, editor [EMAIL PROTECTED] http://www.intellnet.org Post message: [email protected] Subscribe: [EMAIL PROTECTED] Unsubscribe: [EMAIL PROTECTED] *** FAIR USE NOTICE. This message contains copyrighted material whose use has not been specifically authorized by the copyright owner. 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