Congress Blasts VAR Strong Castle Over Alleged IRS Fraud, Certified Status


Castillo also addressed certain issues brought up by the committee.

While the committee said Strong Castle received $500 million in IRS contracts, in reality the company received only $50 million in contracts, of which $49 million went to suppliers and $1 million went to Strong Castle, Castillo wrote.

"Last year, Strong Castle lost approximately $138,000. Strong Castle's losses this year will be even greater due in part to the costs of defending the GAO protests and cooperating with this investigation," he wrote.

Castillo said that, contrary to accusations by the committee that Strong Castle did not have the right experience or performance record for government contracts, Signet Computers in fact had a 15-year record of government work while he himself worked on government contracts via his past employers.

He also wrote that Strong Castle never received preferential treatment from the IRS, and that all actions related to gaining HUBZone status were taken in consultation with the Small Business Administration.

"Unfortunately, other companies are able to use status challenges as competitive weapons in their efforts to overturn contract award decisions made by agencies pursuant to formal procurement procedures. In this case, Strong Castle has already spent hundreds of thousands of dollars to defend itself in a politically charged environment," he wrote.

The problem of solution providers gaining access to government contracts via questionable certifications for service-disabled, minority-owned or woman-owned, are actually widespread, said one government solution provider, who asked to remain anonymous.

"One guy a few years ago was going around asking solution providers for an up-front fee to help them bid on government jobs," the solution provider said. "He said he would be the prime on the contract for a percentage of the deal. He claimed to be service-disabled. But he was hurt in a track-and-field competition, running hurdles. What do hurdles have to do with military service? Nothing."

There are legitimate service-disabled solution providers, some of whom suffer from injuries which, unlike losing a leg or arm, cannot be seen physically, that solution provider said.

"But if I were to put out an ad saying I needed a disabled vet firm to help on a job, I'd get a lot of scum responding," the solution provider said.

Government agencies are a big part of the problem. "The government does a lot of rubber-stamping to show they have the numbers," the solution provider said. "The reality is, there are a lot of service-disabled, woman-owned and small-business companies out there who are not legitimate."

PUBLISHED JUNE 28, 2013