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Contractor continues working at Wright-Patt amid criminal inquiry

APM is accused of concealing information about ownership and management.

Workers for Allied Fence Builders, an APM subcontracter, work on installing perimeter security fencing at WPAFB. On Sept. 23, the Air Force suspended APM, 18 other related companies and four of their executives from further federal contracting work because the companies are suspected of concealing information that would have made them ineligible for a government program designed to give contracting opportunities to small businesses owned and controlled by socially and economically disadvantaged individuals.

Jim Witmer/Staff photographer Workers for Allied Fence Builders, an APM subcontracter, work on installing perimeter security fencing at WPAFB. On Sept. 23, the Air Force suspended APM, 18 other related companies and four of their executives from further federal contracting work because the companies are suspected of concealing information that would have made them ineligible for a government program designed to give contracting opportunities to small businesses owned and controlled by socially and economically disadvantaged individuals.

ENLARGE PHOTO

The exterior of Wright-Patterson contractor APM's mobile home office building on the grounds of the Air Force base. Wright-Patterson has paid APM nearly $26.4 million this year, including more than $12 million in federal stimulus dollars.

Jim Witmer/Staff photographer The exterior of Wright-Patterson contractor APM's mobile home office building on the grounds of the Air Force base. Wright-Patterson has paid APM nearly $26.4 million this year, including more than $12 million in federal stimulus dollars.

ENLARGE PHOTO

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By John Nolan, Staff Writer Updated 5:16 PM Sunday, October 11, 2009

WRIGHT-PATTERSON AIR FORCE BASE — The suspension of the company holding a multimillion-dollar base infrastructure contract has left Wright-Patterson officials scrambling to find a way forward.

The base’s 88th Contracting Squadron said the company, APM LLC, will be allowed to finish projects it already has started, and others that it had been awarded earlier this year but were delayed. That assures continuing work well into 2010 for APM, which handles or subcontracts a wide range of Wright-Patterson Air Force Base projects, including construction, renovations and fence replacements.

The contracting squadron passed up an alternative. U.S. contracting law, known as the Federal Acquisition Regulation, allows federal contracting officers to terminate a contract “for the convenience of the government” as long as the contractor has been paid the minimum amount guaranteed by the agreement. In APM’s case, the contract with Wright-Patterson guaranteed a minimum payment of $100,000 this year.

Some favored contractors already have benefited from APM’s fall from grace.

Daytep Construction, a Dayton construction company that is APM’s main subcontractor, was awarded two projects worth $1.1 million minutes before the federal fiscal year ended on Sept. 30. Base contracting officials said the projects — to install sound-absorbing material in the base firing range and construct enclosures that could reduce damage to Air Force computers — were mission-critical and needed to be addressed. APM had just been suspended on Sept. 23, the officials noted.

“Being the main subcontractor, Daytep would be most familiar with the requirements to execute these projects. A second subcontractor was also contacted, but elected not to submit a proposal,” base officials said in an e-mail response Wednesday, Oct. 7. “A traditional competition and award could not be accomplished in time to meet the necessary schedule for these critical projects.”

Under federal contracting law, this decision could merit scrutiny. The law reads: “Contracting without providing for full and open competition shall not be justified on the basis of a lack of advance planning by the requiring activity, or concerns related to the amount of funds available (e.g., funds will expire) to the agency or activity for the acquisition of supplies or services.”

Daytep’s price was found to be in line with the government’s independent estimate, base officials said.

An investigation deepens

APM’s problems with the government first became public in 2008. The U.S. Small Business Administration suspended the company from the government’s minority, small-business contracting program for what the SBA said was failure to comply with requirements of the program, under which the company was awarded a contract of up to five years for the infrastructure work.

The SBA’s inspector general said the contractor, APM LLC, demonstrated “ongoing refusal to provide truthful and complete information” to the government about the company’s ownership and management structure. APM then voluntarily terminated itself from the small-business program.

Officials of the 88th Contracting Squadron at Wright-Patterson Air Force Base checked with the SBA last year and were informed that APM could be allowed to complete its existing contract, which runs through 2011, if the government exercises all option years. Base officials said in a Sept. 10 interview that they had been satisfied with the work of APM, a California-based contractor that coordinates the local work from a trailer office on the base.

But on Sept. 23, the Air Force — following up on the SBA’s investigation — suspended APM, 18 other related companies and four of their executives from further federal contracting work.

An Air Force lawyer at the Pentagon said the suspension was appropriate because the companies are suspected of concealing from the government information about their ownership and management that would have made them ineligible for the government’s 8(a) program. That program is designed to give contracting opportunities to small businesses owned and controlled by socially and economically disadvantaged individuals.

In an e-mail response to questions from the Dayton Daily News in July, APM chief executive officer Townsend Jackson wrote that his construction company denied the SBA’s allegations.

“No formal determination of their validity has ever been made by any agency,” Jackson wrote from his Yorba Linda, Calif., headquarters on July 13. “SBA was in error in suspending APM from the program. APM repeatedly disclosed its ownership and provided all required information to SBA.”

But Air Force lawyer Steven Shaw presented a very different picture in his Sept. 23 directive suspending APM and the other companies, saying that the Air Force is investigating to determine whether the government was defrauded. That suspension included Townsend Jackson and his brother, Craig Jackson. The Air Force said Craig Jackson has ownership or management control over a number of the companies that makes them ineligible for participation in the 8(a) program, and that he receives income from a number of those companies.

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