Blackwater Gets Small Business Contracts

[Doug]

DOUG
Bush is going full steam ahead on the cronyism.

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WASHINGTON: Blackwater Worldwide, the contractor whose provision of private security in Iraq has been under scrutiny, and its affiliated companies may have improperly obtained more than $100 million in contracts meant for small businesses, according to federal auditors.

A report by the Small Business Administration's inspector general, issued in July, found that Blackwater and its affiliates, including Presidential Airways, won 39 contracts in the fiscal years 2005, 2006 and 2007 despite indications that the companies employed more than the number specified by the U.S. government. In some cases, the report said, the companies also had higher revenues than allowed for a small business.
Blackwater is a major provider of security for American diplomats in Iraq and was the subject of a congressional hearing after a Blackwater shooting in Baghdad last September left 17 Iraqis dead.

Blackwater and Presidential Airways, both based in Moyock, North Carolina, and owned by EP Investments, of McLean, Virginia, won 31 contracts set aside for companies with revenues of $6.5 million or less, and one additional contract for a company with no more than $750,000 in annual revenues. Those contracts, in all, were valued at $2.1 million.

In addition, Presidential Airways, which carries both passengers and cargo, won some $107 million in contracts reserved for companies whose revenues were no more than $25.5 million or had fewer than 1,500 employees.

...The companies could have skirted small business size criteria because they counted many workers as independent contractors, not employees, which allowed them to exceed the 1,500-employee ceiling set in some contracts, according to the auditors.

The inspector general's office found that Blackwater and the other companies' sizes and revenues may have "involved misrepresentations," and suggested that the agency may want to "determine whether it is appropriate for Blackwater affiliates to continue receiving small business set-aside contracts."

See here.