ABT Associates has sleazed other Federal Agencies as well
ABT Associates has been in trouble with several Federal agencies and have had investigations into their accounting practices. In one case, they changed their own rates without asking or telling the contract shop of several agencies. If you Google, you will find a number of Fed agencies that have had to fix ABT's contracting problems and also report to the Inspector Generals. See below for a couple of issues that ABT has dealt with. It is not only CDC where ABT has played contractor games, but many others. I am surprised that the Feds have allowed ABT to continue to be able to bid on government contracts. With the stunts that ABT has pulled, other contracting companies would have been denied the the ability to compete or even put in jail.
I have to assume that they have great lawyers and lobbyists...
ABT Associates, Inc. Of Cambridge Pays $1.9 Million To Settle False Claims Allegations, Reports U.S. Attorney.BOSTON, Mass., Oct. 27 /PRNewswire/ -- A Cambridge consulting firm has paid $1.9 million to settle civil charges brought by the federal government under the False Claims Act.
United States Attorney for the District of Massachusetts, Donald K. Stern and Walter C. Holton, United States Attorney for the Middle District of North Carolina, today announced that ABT ASSOCIATES, INC. ("ABT"), a consulting firm based in Cambridge, Massachusetts, has paid $1.9 million to the United States to settle civil claims arising under the federal False Claims Act.
U.S. Department of Justice
Michael J. Sullivan
United States Attorney
District of Massachusetts
Press Office: (617) 748-3139 John Joseph Moakley United States Courthouse, Suite 9200
1 Courthouse Way
Boston, Massachusetts 02210
December 29, 2006
PRESS RELEASE
ABT ASSOCIATES INC OF CAMBRIDGE AGREES TO PAY $2.9 MILLION TO
GOVERNMENT UNDER TERMS OF A DEFERRED PROSECUTION AGREEMENTBoston, MA... A Cambridge, Massachusetts company entered into a deferred prosecution
agreement with the government, filed in federal court today, to resolve allegations of over-billing
on certain government contracts .
United States Attorney Michael J. Sullivan and Donald A. Gambatesa,, Inspector General
of the United States Agency for International Developments Office of Inspector General,
announced today that ABT ASSOCIATES INC ("Abt Associates"), headquartered at 55
Wheeler Street, Cambridge,
has entered a deferred prosecution agreement in which Abt
Associates has admitted to criminal wrongdoing in connection with over-billing the government
on various U.S. Agency for International Development ("USAID") contracts and has agreed to a
payment of $2.9 million in fines, restitution, and civil recovery. Abt Associates is an employeeowned,
for-profit government and business research and consulting firm which employees more
than 1000 people in the United States and abroad. USAID is the government agency responsible
for administering many of the foreign economic programs of the United States and Abt
Associates is one of USAID's largest contractors.
In addition to the payment, Abt Associates has also agreed to abide by a variety of terms
and conditions for a period of twenty-seven months. Under the Compliance and Ethics section
of the deferred prosecution agreement, Abt Associates agreed to hire a third-party auditor to
prepare a written report and certify that Abt Associates is billing USAID in accordance with its
contractual agreements with the government, improve its supervision of foreign site accounting
and finance personnel and implement an on-the-spot employee cash award system to encourage
employees to uncover and report significant government billing errors. Should Abt Associates
fully comply with the terms of the agreement for a period of twenty-seven months, the U.S.
Attorney's Office has agreed to dismiss the Information that was filed in federal court today and
will not prosecute Abt Associates for its false claims to the United States. The United States
Attorney's Office also entered into a separate civil settlement agreement with Abt Associates
under which Abt Associates agreed to pay treble damages to resolve all civil claims stemming
from this investigation. USAID also entered into a separate compliance agreement with Abt
Associates.
As set forth in the Statement of Facts, to which Abt Associates is admitting, from May
1999 through April 2002, Abt Associates submitted more than 110 false invoices to USAID on
cost plus fixed fee ("CPFF") contracts based in Egypt, South Africa and Zambia in that these
invoices over-billed USAID for foreign labor costs. During the same time period, Abt
Associates submitted similarly false invoices to USAID for CPFF contracts in the Dominican
Republic, Guatemala, Honduras and Rwanda.
By way of background, numerous USAID contracts required Abt Associates to perform
work in foreign countries. Abt Associates typically set up offices in such countries, organized
by contract, and staffed those offices with locally recruited employees who were citizens and/or
residents of those countries, as well as with American citizens recruited in the United States.
When required by the governing USAID contracts, the locally recruited employees were paid in
the local currency (e.g., Egyptian Pounds, South African Rand, and Zambian Kwacha), rather
than in U.S. Dollars. However, Abt Associates was required to submit its contract invoices to
USAID in U.S. Dollars. Many of Abt Associates contracts with USAID were designated "Cost
Plus Fixed Fee" ("CPFF") contracts. Under CPFF contracts, Abt Associates was entitled to be
reimbursed for allowable costs incurred in performing the contract, including local labor costs,
plus a contractually agreed upon fee.
Starting in 1999, exchange rates in many countries in which Abt Associates performed
work for USAID began to fluctuate, notably devaluing in Egypt, South Africa, Zambia and other
countries. As a result of this currency fluctuation, Abt Associates was able to purchase the local
currencies to pay its local employees for fewer U.S. Dollars. Said another way, Abt Associates
true foreign labor costs in dollars decreased. Yet, Abt Associates did not pass its labor cost
savings on to the government as required under the CPFF contracts. It failed to update the salary
information in its billing system and falsely billed USAID for foreign labor charges that were
inflated because they were based on out-of-date foreign currency exchange rates.
As set forth in greater detail in the Statement of Facts, senior management at Abt
Associates knew that the company was over-billing USAID in countries where the local
currency was devaluating relative to the U.S. dollar but they did not stop the over-billing.
This is the second time that Abt Associates has resolved over-billing allegations with the
U.S. Attorney's Office in Massachusetts.
In October 1999, Abt Associates paid a $1.9 million to
resolve civil claims for its premature billing of subcontractor costs which violated the terms of
the governing government contracts.The case was investigated by the USAIDs Office of Inspector General. It is being
prosecuted by Assistant U.S. Attorney Diane Freniere and Auditor Thomas Zappala of Sullivans
White Collar Crime Section. The resolution of the civil false claims case was handled by
Assistant U.S. Attorney Eugenia M. Carris of Sullivan's Civil Division. USAID's Office of the
General Counsel handled drafting of terms and conditions for the compliance and ethics section
of the agreement.
Press Contact: Christina Diorio Sterling, (617) 748-3139
MEMORANDUM
http://www.ssa.gov/oig/ADOBEPDF/audittxt/A-05-08-18041.htm
Date: March 12, 2009
To: The Commissioner
From: Inspector General
Subject: Contract for the Benefit Offset National Demonstration Project with Abt Associates, Incorporated (A-05-08-18041)
The attached final report presents the results of our audit. Our objectives were to (1) review the services provided by Abt Associates, Incorporated, under Contract Number SS00-04-60110 and the related costs charged to the Social Security Administration for adherence to the negotiated contract terms and applicable regulations and (2) ensure the Agency received the goods and services for which it contracted.
Please provide within 60 days a corrective action plan that addresses each recommendation. If you wish to discuss the final report, please call me or have your staff contact Steven L. Schaeffer, Assistant Inspector General for Audit, at (410) 965-9700.
Patrick P. O'Carroll, Jr.
OFFICE OF
THE INSPECTOR GENERAL
SOCIAL SECURITY ADMINISTRATION
CONTRACT FOR
THE BENEFIT OFFSET
NATIONAL DEMONSTRATION PROJECT
WITH ABT ASSOCIATES, INCORPORATED
March 2009
A-05-08-18041
AUDIT REPORT
Mission
By conducting independent and objective audits, evaluations and investigations, we inspire public confidence in the integrity and security of SSA's programs and operations and protect them against fraud, waste and abuse. We provide timely, useful and reliable information and advice to Administration officials, Congress and the public.
Authority
The Inspector General Act created independent audit and investigative units, called the Office of Inspector General (OIG). The mission of the OIG, as spelled out in the Act, is to:
Conduct and supervise independent and objective audits and investigations relating to agency programs and operations.
Promote economy, effectiveness, and efficiency within the agency.
Prevent and detect fraud, waste, and abuse in agency programs and operations.
Review and make recommendations regarding existing and proposed legislation and regulations relating to agency programs and operations.
Keep the agency head and the Congress fully and currently informed of problems in agency programs and operations.
To ensure objectivity, the IG Act empowers the IG with:
Independence to determine what reviews to perform.
Access to all information necessary for the reviews.
Authority to publish findings and recommendations based on the reviews.
Vision
We strive for continual improvement in SSA's programs, operations and management by proactively seeking new ways to prevent and deter fraud, waste and abuse. We commit to integrity and excellence by supporting an environment that provides a valuable public service while encouraging employee development and retention and fostering diversity and innovation.
Executive Summary
OBJECTIVE
The objectives of our audit were to (1) review the services provided by Abt Associates, Incorporated, (Abt) under Contract Number SS00-04-60110 and the related costs charged to the Social Security Administration (SSA) for adherence to the negotiated contract terms and applicable regulations and (2) ensure SSA received the goods and services for which it contracted.
BACKGROUND
SSA contracted with Abt to develop the Benefit Offset National Demonstration (BOND) project to test alternate methods of treating work activity in the Title II disability program. The contract states that after the design is completed, subsequent phases of this demonstration are to be awarded to the same contractor on a sole-source basis for the project's implementation, data collection, and evaluation and management. This award will be contingent upon successful performance of the design phase. A $2.4 million cost-plus-fixed-fee contract was awarded to Abt with a period of performance from September 2004 to September 2006. Because of contract modifications and additional task orders, the contract was extended to September 2008 at a total cost of approximately $10.6 million.
To inform the BOND design phase, SSA awarded four separate contracts for a total cost of $3.9 million in what was called the Four-State Pilot. The contracts were awarded to Connecticut, Utah, Vermont and Wisconsin. The Pilot was to be a 2-year demonstration project expected to end in April 2007. However, numerous contract modifications have extended the contract through April 2009 at an estimated cost of $8.4 million.
RESULTS OF REVIEW
We found that Abt generally adhered to the terms of the contract and delivered the services and final design options that SSA asked for under the contract. However, we have several concerns about the delays and costs associated with the design phase. While SSA is required by law to continue with the demonstration project, we are concerned that the multiple modifications extended the contract period from 2 to 4 years, and the design phase costs increased to $10.6 million, or $8.2 million more than initially expected. We believe approximately $5.3 million, or half of the total costs, could have been put to better use had the contract been better focused and completed within the initial timeframe. The delay of the BOND design phase also led to additional costs under the Four-State Pilot, or $4.5 million more than initially expected. As a result, during our audit period, the obligated cost for BOND and the Four-State Pilot was approximately $19 million, considerably more than the planned combined costs of $6.3 million.Contract Initial Design Costs1
Obligated Costs1 Increase
(Percent)2
BOND $2.4 million $10.6 million 342
Four-State Pilot $3.9 million $8.4 million 115
Totals $6.3 million $19.0 million 202
Note 1: Design costs also include pre-implementation costs added by SSA management.
Note 2: Percent increases do not total since each calculation is specific to each set of costs.
Prior SSA management demonstrated inadequate oversight of the contract's planning, scope and expenditures. While current SSA management attempted to streamline the BOND project's design, financial monitoring of the project was inadequate. For instance, while the Office of Management and Budget requires enhanced controls over cost-reimbursement contracts, in our review of invoices, we were unable to determine whether the contractor over- or under-billed for a specific task due. Furthermore, the contract was not monitored in a way that allowed for quickly detecting or avoiding cost overruns for tasks. Moreover, we found that SSA did not perform timely interim contractor performance evaluations, as required by the contract and recommended by the Federal Acquisition Regulation (FAR).
In terms of contract coordination, the first BOND design was submitted to SSA management before the Four-State Pilot participants formally presented their feedback to the contractor. We believe that earlier communication between BOND and the Four-State Pilot regarding the project's design would have enhanced the Pilot's usefulness to the BOND contractor. Finally, we found that the BOND project's current sole-source contract lacks clear separation of duties by allowing the contractor to evaluate its own performance.
RECOMMENDATIONS
To enhance oversight of the BOND project and future contracts of a similar nature, we recommend that SSA:
1. Before awarding the next phase of BOND, ensure a detailed cost-benefit analysis of the BOND design phase has been conducted and documented to support an Agency decision to continue with this contractor. As a part of the analysis, the Agency should have (a) reviewed the current status of the project, (b) assessed what value the Agency received for the costs already incurred, (c) determined whether the entire BOND project can be completed at a reasonable cost, and (d) documented the Agency's justification for the continued use of the current sole-source contractor as well as the type of contract being used.
2. Establish a greater degree of management oversight by strengthening contract oversight roles and responsibilities and more clearly defining contract requirements.
3. Improve financial monitoring by implementing the procedures necessary to (a) identify the work for which the contractor is requesting payment and (b) maintain documentation to prove to an outside party that value was received for the money expended.
4. Conduct and document interim and final evaluations of the contractor's performance in accordance with the contract and as recommended by the FAR.
5. Ensure timely and meaningful participation occurs with other parties associated with the demonstration project, such as the States involved in the Four-State Pilot, to enhance the total project.
6. Ensure the evaluation phase of the BOND contract is conducted by an independent party.
AGENCY COMMENTS