A District.-based company overcharged the city’s Office of the Chief Technology Officer by $3.1 million over a two-year period, including $2.5 million in unsubstantiated invoices, according to a D.C. inspector general’s report.
From 2006 to 2008, Delivering Business and Technology Solutions Inc. received nearly 20 percent of the $94.1 million OCTO paid to outsource District information technology projects. That’s “a disproportionate amount of contract payments,” the inspector general’s report concluded.
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District auditors say the company’s internal records showed that in 2007 and 2008 it sometimes charged the city for paid-time-off hours for DBTS employees and didn’t have a paper trail for payments to subcontractors. The report also says the company earned a profit as high as 23 percent on its District contracts, about 13 percentage points higher than federal department of defense contractors are allowed to earn for similar services. The company earned an $600,000 in excess profit and $2.5 million from the questionable invoices, the report concluded.
Delivering Business and Technology Solutions Inc. was founded in 2000 as a minority- and woman-owned company that offered technology consulting services in the District. It closed down late last year, just as its star appeared to rapidly rising. In 2006, DBTS was listed as one of the 500 fastest growing private companies in the country by Inc. Magazine, and last year DiversityBusiness.com rated the company as one of the top 15 minority-owned businesses in the District.
The audit of OCTO’s contracting practices continued to highlight failures in procurement practices that helped make it possible for a group of the agency’s employees to run a four-year bribery and kickback scheme unraveled by federal authorities in the spring of 2009.
The inspector general’s office launched this latest investigation after receiving complaints that DBTS was receiving preferential treatment because the company was owned by a former OCTO employee. An inspector general review of human resources’ files could not substantiate the claim, and OCTO had no record before October 2008 of contract employees.
Reached by phone Tuesday, the former president and chief executive officer of DBTS, Karla Gonzalez, told The Washington Examiner that she had worked as a contract OCTO project manager from 2002 to 2004.
She described her current job as a consultant on federal contracts for Ashburn-based Valued Technology Inc. The company’s Web site lists her as its president and founder.
The inspector general’s report says OCTO plans to ask DBTS to pay back the $2.5 million from unsupported invoices. An OCTO spokeswoman did not respond to requests for comment.
“I don’t know about that information … it’s a business matter,” Gonzalez said. “It doesn’t involve me.”
