Two Government Contractors and Owner Agree to $1 Million Settlement Over Federal Bid Rigging Allegations

Two government contractors and their owner have agreed to pay $1 million to resolve allegations that they coordinated with a Boston-based logistics company to submit fraudulent bids and increase the cost of contracts paid by the U.S. Department of Defense, they said. on Friday federal prosecutors.

SAFE Structure Designs, a Las Vegas company that sells safety equipment, and USA Manufacturing, a general construction company, are owned by Johnny Buscema Jr. of Port Richey, Florida, the U.S. attorney’s office said in a statement.

The companies were accused of participating in the scheme with Noble Sales Co., a Boston-based supply chain management company, to make “coordinated bids,” prosecutors said.

Massachusetts U.S. Attorney Joshua Levy said the companies “gamed the system to line their own pockets.”

“They manipulated and undermined the fair and open bidding process designed to save our military (and taxpayers) money,” Levy said in a statement. “Contractors must be scrupulous in dealing with the government, not coordinate with each other to improve their results. “When defense contractors collude, rather than compete, they violate the law and the public trust.”

Noble Sales is a major defense contractor through the Defense Logistics Agency, which the Defense Department uses to purchase goods and services, for maintenance, repair and operations contracts in the Northeast and Southeast, prosecutors said.

When the Defense Department places orders through Noble, the company must solicit bids from two independently competing vendors for transactions under $25,000, and from three independently competing vendors for transactions of $25,000 or more, they said. the prosecutors.

Under the agreement, Buscema and his two companies admitted to submitting bids, known as “courtesy bids” or “comps,” at the request of Noble Sales to ensure other suppliers won the business, avoiding competitive bidding requirements.

For these bids, Noble gave Buscema and his companies “specific prices that Buscema’s companies should bid or a price that the bids should exceed,” prosecutors said.

Buscema and the companies also admitted to paying two other suppliers to submit at least 60 false bids so their companies could win contracts, according to prosecutors.

Busecema also admitted, on occasion, to submitting bids from his two companies for the same contract, prosecutors said. Noble knew Buscema owned both companies, they said.

As a result, the winning bid appeared more competitive than it actually was, prosecutors said.

Buscema’s attorneys could not immediately be reached for comment Friday. Attempts to contact a spokesperson and attorneys for Noble Sales were unsuccessful. Noble Sales was not a party to the deal.

You can contact Nick Stoico at [email protected].