Fighting fraud in AF SBIR and STTR programs

  • Published
  • By AFOSI Public Affairs
In 2015, the Air Force Office of Special Investigations, Office of Procurement Fraud Investigations Directorate identified an opportunity to fight fraud in the Air Force's Small Business Innovation Research and Small Business Technology Transfer programs. 

The OSI Procurement Fraud Investigations team turned this opportunity into a proactive fraud-fighting initiative by teaming with the Air Force Materiel Command Law Office Procurement Fraud Division, the Air Force Research Laboratory Contracting Office and SBIR/STTR Program Office at Wright-Patterson AFB, Ohio. The team designed changes to close loopholes and strengthen both SBIR/STTR contracts and procedures. 

"These changes serve another key purpose, they bolster the government's position in civil and criminal cases by providing substantive evidence against SBIR/STTR contractors who defraud the Air Force," said OSI Special Agent Paul Wachsmuth, OSI Procurement Fraud Investigations Director. "The combined effect creates a sharp new deterrent against fraud, and makes it more difficult to commit fraud--and to get away with it--on SBIR/STTR contracts."

Seven operative changes resulted from the team's recommendations.  They include: 

     -  The AF SBIR Program will require, as a condition of eligibility, all proposers and their principal investigators review training slides on the SBIR/STTR program rules and attach certificates of completion with every proposal submitted. The certificate, good for 90-days, provides evidence of a contractor's "knowledge," which makes the difficult legal requirement of "intent" easier to prove.

    -  A statement will be added to the Selection Notification to Small Businesses indicating the number of proposals received and awards made for each solicitation. This statement proves damages (lost opportunity) from fraud to the Air Force and Small Business programs - a  difficult intangible to otherwise demonstrate in court.

    -  All SBIR/STTR contracts will contain a new clause requiring contractors to identify the principal investigator for each SBIR and STTR contract. Written approval from the Air Force will be required prior to changing the principal investigator. Eligibility requirements contained in the Small Business Administration's SBIR/STTR policy directives will also be incorporated.  These changes will make it more difficult for a contractor to engage in a "bait and switch" scheme by proposing an experienced researcher as its principal investigator while actually having a different, lower-qualified (lower-cost employee) serve in that role.

These initiatives may appear nominal on the surface. However, their impact is substantial in the fraud fight - placing the Government in the strongest position for holding a fraudulent contractor accountable. The AFRL Contracting Office implemented the team's recommended changes in December 2015, in time for inclusion in the Air Force's 2016 Solicitation for SBIR/STTR proposals. 

The Air Force SBIR/STTR Program Office has integrated these changes into SBIR and STTR contracts Air Force-wide. 

"This fraud fighting initiative protects the integrity of the government's procurement process, and saves precious taxpayer dollars," said Sharon Curp, Chief, Procurement Fraud Division, AFMC Law Office. "Equally important, the initiative champions research advances not only to ensure our position as the world's most advanced Air Force, but also to eliminate significant threats to the safety of our warfighters that could result in serious injury or even death."  

If you suspect fraud on an Air Force contract, contact your local AFOSI office or report it through the AFOSI anonymous tip line found on the public web site: