Schemes targeting small business contractors proliferate

PTAC small business clients are reporting alarming new tactics being used by some for-profit firms trying to get them to sign up for services. In one case, a company “cloned” an SBA webpage, to make it appear that the SBA was recommending registration in a specific subcontractor database.  In another example, a firm has been reaching out to “potential subcontractors” claiming to be working on a specific DoD project; further investigation has shown this to be false and fraudulent.

At the same time, small contractors continue to be flooded with official sounding emails, texts, phone calls and even faxes that are part of sophisticated marketing campaigns designed to entice them to sign up for services that they may not want or need.  The so-called “services” involve hefty fees, of course. PTACs regularly hear from business owners who – thinking they are responding to a government official – mistakenly commit to a sales contract they don’t understand and can’t get out of. Worst of all, many of the sales pitches are for substandard services that PTACs provide in a superior fashion at no cost.

Knowledge is the best defense. Below are details of some recent campaigns that have come to APTAC’s attention.  Be alert to any such communications you receive – or anything similar – and think carefully before responding.  If you have questions or suspicions, feel free to reach out to your local PTAC to discuss. As with any business decision, thorough research into qualifications, costs, realistic expectations, and clearly articulated deliverables is the key to determining the right solution for your business. Never let yourself be pressured into a hasty decision or enticed by an “easy fix” or opportunity. Careful due diligence is always the best investment you can make.

Recent campaigns that we’ve been alerted to include:

  • Subcontractor “Phishing”: Very convincing emails come from a firm that purports to be a prime contractor looking for subs for potential set-aside subcontracts.  After some preliminary questions, the small business is told that the agency contracting officer is concerned about past performance – because the business does not have a profile in a particular database.  Be advised: DoD, Homeland Security, FEMA, and other agency officials do not rely on private databases for past performance information. They use SAM, the SBA’s Dynamic Small Business Search (DSBS) and the federal Past Performance Information Retrieval System (PPIRS) for their work, none of which entail a fee.
  • “Profile Processing”: Have you just registered (or renewed) in SAM (the government’s System for Award Management)?  You may receive a notice that says, “Your SAM registration for your CAGE Code has been received and is in processing. The next step is to assign your company a Senior Case Manager whose function is to manually process all of your profile details in the various federal databases as required per Federal Acquisition Regulations. For this, a $599 registration fee is immediately due and payable with any major credit card,” or “Your Profile Information has been received and is processing. . . . Call us via our helpline at (xxx) xxx-xxxx to find out your company’s eligibility and compliance requirements,” or a similar message.  These messages do NOT come from the government!  They come from one of several private firms that want you to pay them big bucks (up to $3,500 or more) to handle your profile. They monitor SAM registration activity closely – and then send emails like these (or even text messages) that may seem like a government confirmation or follow-up.  Offers to “manually enter profile details,” “review eligibility,” or “find out what needs attention” come from private firms – not SAM or any other federal agency – and will include a significant – and unnecessary – price tag.
  • SAM “Renewal” notices: You may receve a message exhorting you to renew your SAM registration and “Click here to continue to receive federal payments” or call a designated number to “renew over the phone“. In actuality, SAM renewals are to be accomplished – by you – online.  There is no capability to renew “over the phone” unless you are paying someone else to do it online for you.  And SAM registration allows the government to pay vendors electronically without the need for an intermediary.  This notice also incorrectly states:“Fail to renew your Registration, and the government will place your business on the federal watch list.” There is no such thing! Renewing a SAM registration is a simple task that business owners can accomplish easily, on their own.  For those with questions, or for those who need help making changes, PTACs stand ready to help – at no cost to the business owner. Never give your SAM user name and password to anyone else!
  • “Vendor Listings”: PTAC clients have been reporting contacts from “US Army Contracting officers” who request their Capability Statement and then urge them to register with a private firm (which also offers consulting services) to include their company on its vendor listing (for a substantial fee).  One client dug deeper to discover that the “contracting officer” listed in the email had no knowledge of the firm and that the email address it came from (with a spoofed “.mil” address) was not a valid email. Consulting a private “vendor listing” for agency purchasing runs counter to Federal Acquisition Regulation (FAR), and any claim to the contrary should be viewed with skepticism.
  • Easy sole-source promises: We’ve just become aware of a newer firm that promises “to connect qualified applicants to sole and sub source contracts with the United Nations and government agencies domestically and abroad.”   Their very personalized and targeted marketing campaign is forthright about being a company and not an agency—but the company implies that they can offer immediate, concrete and assured opportunities, including the statement “Sit back, relax, and watch the orders come to you. Be ready to fill them!”  Beware of promises like these that are too good to be true. Success in government contracting requires a carefully-considered, long-term strategy and hard work.  There are no short cuts.

Of course there are circumstances in which it makes sense for a small business to pay a consultant for specialized legal or financial help or for intensive project development, and there are many qualified professionals to choose from. But it is important to make these decisions based upon your specific needs in the context of your long-term strategy.

Remember: There is NEVER a fee to register as a government contractor. Repeat – there is NEVER a fee to register as a government contractor. And there is free and low-cost help available to get you through the process.

For those who’d like help with registrations, renewals, certification applications, or any other government contracting issue, Procurement Technical Assistance Centers (PTACs) provide and free and low-cost expert assistance with all aspects of government contracting.  PTACs offer classes, one-on-one counseling, bid-matching services, advice on proposal preparation, matchmaking/networking opportunities and much more. Many PTAC counselors have backgrounds in government acquisition offices or prime contractor government contracting departments, so they bring real world experience to help you.

For those companies that need more basic business assistance, Small Business Development Centers (SBDCs) provide similar hands-on, personalized help for general business operation topics. Because small companies must make every dollar count, it’s smart to leverage these services that are provided through non-profit, federal-local partnerships for the specific purpose of supporting small businesses.

To receive assistance with any aspect of vendor registration with any government agency at no cost, please feel free to contact a PTAC near you.