VA Contracting Official improperly helped FedBid

VA contracting official misused her position to help company, IG report finds

By Christian Davenport   October 2, 2014
The fast-growing Northern Virginia contractor on its way to becoming a multibillion-dollar company had inked yet another important deal with a federal agency. But then a bureaucrat at the Department of Veterans Affairs stepped in, raising troubling questions about the contract and suddenly halted all work.

FedBid, the Vienna-based company that lists senior Pentagon officials as advisers and has connections all over Washington, mobilized quickly. It dispatched a billionaire investor and a retired Army general to lean on then-VA Secretary Eric Shinseki and the VA chief of staff, pressing them to lift the moratorium with urgent e-mails and phone calls.

And the company, which runs Web sites that contractors can use to bid for government business, went after Jan Frye, the VA procurement official who issued the moratorium.

“Need to assassinate his character and discredit him,” read an e-mail from a top executive in 2012. The firm also vowed to “unleash the hounds” and “take off the gloves” in its “storm the castle” campaign to win back the business.

It worked. Within days, the moratorium was lifted. FedBid’s business began to hum once again. And the power play was feted with a triumphant congratulations from the company’s chief executive.

In an e-mail with the subject line “We are back in VA!” Chief Executive Ali Saadat thanked AOL founder Steve Case, whose venture capital firm had recently invested $25 million in FedBid and who had contacted Shinseki through his private e-mail account on a Sunday evening. Case “started our first punch,” Saadat said. He also thanked retired Army Chief of Staff Gen. George Casey Jr., a member of FedBid’s board of directors, for playing “his role as the heavy handed puncher.”

The intense pressure involving highly influential Washington players is detailed in a recently released VA Inspector General report, which is unusually revealing in its accounting of the kind of lobbying that happens every day in Washington but is rarely laid out so clearly.

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