The House Oversight and Government Reform Committee Chairman Darrell Issa (R-Calif.) released a report on Tuesday, detailing what he characterized as “a problematic and abusive contracting relationship” between the Internal Revenue Service (IRS) and contractor Strong Castle. The report found that a personal relationship between an IRS contracting official and the owner of a company, Strong Castle/Signet Computers, facilitated contracts in a six month period that could be worth nearly $500 million.
Prior to January 2012, the company had only $250,000 in annual revenue. The report, detailing a Committee investigation that began in February, also found that Strong Castle/Signet Computers gained an advantage over competitors by gaining a socioeconomic HUBzone business designation by making false representations to the Small Business Administration.
According to Issa, despite knowing about these concerning issues with Strong Castle/Signet Computers, the IRS has failed to revoke tainted large contract awards or take disciplinary action against IRS employees who acted inappropriately. Throughout the report, numerous examples from texts, emails, and witness testimony show that the IRS contracting officer played an often hands-on role in tilting the table in Strong Castle’s favor in numerous contract competitions.
“Today, the IRS cannot look taxpayers in the eye and truthfully say they are protecting their contributions to government,” said Issa. “By inappropriately using a personal relationship and abusing a provision designed to help disadvantaged businesses, the IRS and Strong Castle have made a mockery of fair and open competition for government contracts. Taxpayers deserve accountability and the Committee is troubled by this unacceptable behavior.”
Today, the Oversight Committee will hold a full committee hearing at 9 am in Rayburn 2154. The hearing will be streamed live at oversight.house.gov