Florida State Attorney General Sues GSA Applications Firm for Misleading Business Practices

By Jeff Cuskey, Monterey Bay Procurement Technical Assistance Center

Caveat Emptor – “If it sounds too good to be true …”
Federal Verifications Co. Inc., (dba GSA Applications) is named in the suit.

As a small business owner, I am willing to bet that you occasionally get unsolicited calls and emails from commercial firms and telemarketers wanting to sell you their government contracting services. In most cases, these calls come from legitimate businesses. However, in a few cases, they come from telemarketers that make misleading and false claims. These firms state they can get you a GSA Federal Supply Schedule (FSS) contract in a relatively short period of time and “guarantee” your company will get government required minimum revenues upon contract award. Unfortunately, many small businesses have fallen prey to these companies’ misleading business practices. They are enticed by the telemarketer’s “guarantees” and make large advance payments for promised services that are often not delivered.

The following press release from the Florida State Attorney General highlights the need to perform due diligence prior to entering into a contract with an unknown company that makes claims that “sound too good to be true”. Please remember this case is still pending as of this blog posting and has not yet been decided by the Circuit Court of the Sixth Judicial Circuit in and for the Pinellas County, Florida, Civil Division.

“November 5, 2014

Attorney General Bondi Sues GSA Applications Company for Misleading Business Practices

TALLAHASSEE, Fla.-Attorney General Pam Bondi’s Office filed a complaint against an Oldsmar, Florida-based company allegedly misleading small businesses by claiming to be the U.S. General Services Administration or implying a government affiliation to offer a five-year GSA contract. The Federal Verification Co, Inc. dba GSA Applications conducts business through more than 60 business names and more than 50 websites. The company and manager of the businesses, James Dale Sprecher, allegedly used telemarketing to solicit small businesses and guarantee them a GSA contract within a short time frame, 90 days to six months, for an upfront fee ranging typically from $5,000 to $8,000. A GSA contract allows a business to sell goods and services to the federal government at pre-negotiated pricing. Attorney General Pam Bondi’s Office received more than 200 complaints about the defendants’ unfair business practices. The Complaint alleges violations of the Florida Deceptive and Unfair Trade Practices Act. According to the complaint the company allegedly:

• Makes false and misleading representations as to the likelihood of a customer successfully obtaining a GSA contract, including assuring the business that it qualifies for a five-year to 20-year GSA contract award;

• Makes false and misleading representations assuring government-guaranteed minimum revenues upon a contract award and a 100 percent guaranteed return on investment;

• Unfairly collects advance fees, up to $10,000, from customers before services begin; and

• Enrolls customers without diligent review of their circumstances, adequate disclosure of requirements pertaining to the customer or its products or services, or regard for the customer’s meaningful probability or being awarded a GSA contract.

Anyone who suspects unfair or deceptive business practices can file a complaint with the Attorney General’s Office online at MyFloridaLegal.com or in-state via phone at 1-866-NO-SCAM. Out-of-state individuals can call 850-414-3990”.

It should be noted that Federal Verifications Co. Inc., dba GSA Applications has offered their “services” under 65 plus distinct business names and approximately 59 website domains. One known business name not listed on the formal Florida State Attorney General Complaint is “United Consulting Services”. There may be others. In addition to the named companies, the complaint lists “James Dale Sprecher, an Individual” as a defendant. (Please see pages 3 and 4 of the complaint for a listing of the known current and former business names used by the defendant) (Filing # 20199731). The complaint is posted on the Florida State Attorney General’s website under Case Number L10-3-1190 Federal Verification Co, Inc. and GSA Application Services.

http://www.myfloridalegal.com/EC_Edoc.nsf/Enforcement/6CE2DCC55F1BACBD85257D8800731EFB

If you know a business owner that may have been misled by Federal Verification Company, Inc. or one of their other 65 plus “doing business as” (dba) names and/or did not receive promised services, I recommend you advise them to file a formal complaint with the Florida State Attorney General. The Attorney General’s complaint seeks injunctive and other statutory relief against this company, including restitution to affected customers.

This case should serve as a reminder for business owners to adopt a “Buyer Beware” mindset and conduct due diligence before entering into a contract with an unknown company, especially a company that frequently changes their business name and associated web sites.


 

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Jeffrey R. Cuskey, CPCM, CFCM, CSCM, CPP is currently the Senior Procurement Specialist/Counselor with the Monterey Bay PTAC. He has over 25 years of experience in federal and defense acquisition, contracting, program management and business financial management. In addition to twenty years of active duty service with the US Navy, Jeff served for twelve years as a full time MBA faculty member at the Naval Postgraduate School (NPS), Monterey, CA, developing and teaching defense focused graduate level Government Acquisition, Contracting and Program Management courses. In addition to earning a MS in Acquisition & Contracting from NPS, Jeff is a Certified Professional Contracts Manager (CPCM), Certified Federal Contracts Manager (CFCM), Certified Schedules Contracts Manager (CSCM) and Certified Procurement Professional (CPP).


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