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Air Force punishes 20th contractor in fraud case

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By John Nolan, Staff Writer 5:52 PM Thursday, November 12, 2009

The Air Force has suspended from federal contracting privileges an additional company related by family ties to APM LLC, the Wright-Patterson Air Force Base infrastructure contractor that was suspended in September because of alleged fraud against the government.

CON-COR Inc., a construction contractor based in San Antonio, Texas, was suspended from government contracting on Nov. 3 because it has a joint business venture that links it with Townsend Jackson, the APM chief executive officer whom the Air Force suspended Sept. 23 along with his brother Craig, two other family members, and 19 related companies, the Air Force said.

The Air Force has alleged that the Jackson brothers concealed from the government their ownership and control of numerous companies. The government, which is investigating to determine whether crimes were committed, said that allowed the companies — including APM — to obtain federal contracts from 2004 to 2008 under small-business set-aside programs for which the companies were not eligible. The alleged wrongdoing can be “imputed” to CON-COR and a joint venture with APM because of its business relationships with, and control by, the Jacksons, the Air Force said.

The Air Force said the relationships between the suspended companies made APM too large to participate in the government’s 8(a) program, created to give minority-owned small businesses an advantage in competing for specified contracts.

APM has been suspended from pursuing new contracts, but is being allowed to finish base infrastructure projects that it had been assigned at Wright-Patterson. Sen. Tom Coburn, R-Okla., a member of the Senate Committee on Homeland Security and Governmental Affairs, has asked the Defense Department to explain why contractors accused of wrongdoing are continuing to receive federal stimulus funding.

CON-COR contracts with Sanders Engineering Inc., one of the suspended companies, which is headed by Craig Jackson, the Air Force said. CON-COR/APM JV, a joint venture with APM, has Townsend Jackson as an officer.

The Jackson brothers did not respond to a telephone message left at their Yorba Linda, Calif., office requesting comment on Thursday, Nov. 12. Tony Franco, a lawyer for Sanders Engineering, also did not return a call requesting a response.

CON-COR, the 20th company to be suspended from government contracting, and the joint venture are included in the latest suspension. Steven Shaw, the Air Force lawyer who signed the Nov. 3 suspension document, would not comment Thursday on whether additional, related suspensions are expected, said Lt. Col. Ann Stefanek, a spokeswoman at the Pentagon.

Separately, the SBA is proposing to change rules which govern the way companies affiliated with Alaska native corporations — considered to be economically disadvantaged businesses — are allowed to compete for federal contracts. APM is owned by such an Alaska native corporation, according to the government.

The SBA has published its proposed rules changes in the Federal Register, to allow public comment until Dec. 28.

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