US government contractor to pay $1m over allegations of fraudulent bids

Johnny Buscema Jr. of New Port Richey, Florida, and his companies, S.A.F.E. Structure Designs, based in Las Vegas, and U.S.A. Manufacturing, based in New Port Richey, have agreed to pay the sum.

It was alleged that Department of Defense (DoD) customers had been overcharged for goods and services purchased under contracts linked to the bids.

Buscema owns S.A.F.E. Structure Designs, which sells safety equipment to government customers, and USA Manufacturing, a general construction company.

Both companies provide third party logistics support to military customers through DLA contracts for Maintenance, Repair and Operations (MRO) for the Northeast and Southeast regions of the United States.

The MRO contracts covered by the settlement are held by a “prime vendor,” which procures for DoD agencies supplies and equipment, such as chemicals, electrical supplies, hardware, HVAC/refrigeration, prefabricated structures and a variety of small tools.

To obtain the best price for items procured for the government, the MRO contracts require the prime vendor to engage in a competitive bidding process, soliciting bids from two independently competing vendors for transactions below $25,000 and from three independently competing vendors for transactions at or above $25,000.

The United States alleged that, from 2016 to 2023, the settling parties conspired with other entities to rig bids for awards on the MRO contracts for the Northeast and Southeast regions of the United States.

Buscema allegedly submitted non-competitive bids, paid other vendors to submit non-competitive bids and submitted multiple bids from his own two companies on the same solicitations to assist the prime vendor to meet its obligation to obtain bids from two or three vendors and to make one of the bids appear more competitive.

As a result of these alleged schemes, the United States contends it was overcharged for items purchased under the MRO contracts.

The US Department of Justice stressed that the claims resolved by the settlement are allegations only. There has been no determination of liability.