Cisco gold partner MicroTech center of $1.4 billion federal contracting scandal

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Cisco gold partner MicroTech center of $1.4 billion federal contracting scandal

Hummelstown, PA: Fri, 12/27/13 - 11:59pm View comments

Update 2/10/2014:

Cisco appears to have demoted its Gold Partner - Microtech to the lowly status of a mere Silver Partner. That means Microtech's government customers will be paying higher prices for Cisco gear, all-in-all, not a bad thing for Cisco which will earn more profit from government sales that it will then transfer overseas to evade paying U.S. income taxes on its sales to the U.S. Government!

Update 1/30/2014:

Washington Post: Consultant for MicroTech said he vetted inaccurate information with firm’s CEO

"In the agreement, the firm acknowledged that statements included in Jimenez's 2005 application 'were not accurate,' but company officials attributed the statements to 'MicroTech's consultant,' the agreement shows.

"In an interview, Anderson disputed that characterization. Although Anderson drafted the statements, they were crafted after multiple telephone conversations with Jimenez and were 'based on the information he provided,' Anderson said. The implication that he is responsible for the content of the statements is 'nonsense,' he said.

"Anderson said that he had no reason to provide misleading information on MicroTech's behalf because he received his $4,490 fee whether or not MicroTech was accepted into the SBA's program."

Update 1/29/2014:

Washington Post: SBA lifts ban on small business contractor after chief executive temporarily steps aside

"The Small Business Administration has lifted a contracting ban on MicroTechnologies LLC after the firm's chief executive agreed to give up day-to-day control while authorities continue to investigate allegations that he provided false information about its ownership and operations."

Update: 1/3/2014:

Washington Post: Government questioned MicroTech about its role in HP fraud allegations

"MicroTechnologies LLC is among two companies and six executives who are said to have taken part in the efforts to boost the revenues of software maker Autonomy before its sale to HP, according to documents prepared by the Air Force deputy general counsel's office that raised the possibility of barring all the parties from receiving federal contracts.

"Contracting and Air Force documents show that MicroTech worked with Autonomy to resell the larger company's software to the government and to other private-sector customers. The Air Force is one of HP's largest government customers. The Air Force letter said that in some cases MicroTech and Autonomy claimed to close out millions in software deals 'when no transaction closed at all.'

"The Air Force action is focused on the HP claims about Autonomy's accounting and sales practices. 'Autonomy used you to accelerate revenue recognition or, in some cases, to recognize revenue that Autonomy subsequently refunded in one fashion or another to you,' the Air Force letter said.

"In one instance, the letter alleged, MicroTech claimed to sign off on a deal on March 30, 2010, to resell $11 million in Autonomy software licenses to an organization described as 'Entity A.' The Air Force concluded, however, that the 'Entity A transaction never consummated,' the memo said.

"After an outside auditor questioned the deal, Autonomy wired MicroTech $9.6 million to pay for putative services and 'MicroTech subsequently wired $9.6 million back to Autonomy' to pay for 'outstanding MicroTech receivables,' the Air Force said. 'Your alleged conduct raises serious concerns regarding your business integrity and overall responsibility because you are a U.S. Government contractor,' the Sept. 6 letter to MicroTech said. 'I consider these allegations sufficient to support your proposed debarment from Government contracting.'

"Debarment blocks companies or individuals from receiving government contracts."

A 47-time winner of the Pulitzer Prize, The Washington Post, has revealed that Cisco Gold Partner, MicroTech, is at the center of a $1.4 billion federal contracting scandal.

Earlier this month, the Small Business Administration (SBA) wrote a letter of proposed debarment to MicroTech:

"SBA is proposing to debar Micrctechnologies, LLC d/b/a MicroTech (MicroTech) (Duns: 145454182, and 078468018), and Mr. Anthony Jimenez from future contracting with any agency of the Executive Branch of the United States Government under Section 9.406 of the Federal Acquisition Regulation (FAR), Title 43 of the Code of Federal Regulations (CFR)."

According to the Washington Post:

"The SBA said it has information showing that Tysons Corner-based MicroTechnologies LLC and its founder, Anthony R. Jimenez, submitted 'false and misleading statements' in order to receive preferential treatment. The agency said the false statements included one that 'appears to be a complete fabrication' to hide the extensive role of two investors who apparently worked with Jimenez to launch, bankroll and operate MicroTech."

Tony Jimenez gives his "take" on how he and MicroTech became successful at federal contracting: