Fraud, Waste, and Abuse Tutorial Certification for Small Businesses
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I, the Corporate Official for the firm named
below, certify that I have read and understand
the
Fraud, Waste, and Abuse Tutorial
included in
the following slides and acknowledge the criminal
consequences, civil liabilities, and administrative
actions that may result from a conviction of
SBIR/STTR-related fraud.
<
Name
>
<
Firm Name
>
<
Title
>
<
Date
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Signature on page 1 indicates agreement with the
certification statement shown.
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Save completed file as a PDF and upload it to:
in
accordance with due date requirements specified in the
DON SBIR/STTR contract.https://www.navysbirprogram.com/navydeliverables/
•
Use the “FWA Certification” deliverable label during the
upload process.
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Email a copy of the file to the Technical Point of Contact
(TPOC) identified in the contract.
•
Maximum file size is limited to 25MB.
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April 2021
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
T
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Statutory Requirements
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Education and Awareness
•
Definitions
•
Certifications
•
Areas for Potential Fraud, Waste, and Abuse
•
Consequences of Committing Fraud
•
Administrative Remedies
•
Quick Reference
•
Summary
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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15 USC 638 (k)(2)
•
§638(k)(2): …a database to be used exclusively for
SBIR and STTR program evaluation that…
[§638(k)(2)(G)] includes a timely and accurate list of
any individual or small business concern (SBC) that
has participated in the SBIR program or STTR
program that has been—
(i) convicted of a fraud-related crime involving funding received
under the SBIR program or STTR program; or
(ii) found civilly liable for a fraud-related violation involving
funding received under the SBIR program or STTR program.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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2019 SBA SBIR/STTR Policy Directive
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(9)(f)(1): Agencies shall evaluate risks of fraud,
waste, and abuse in each application, monitor and
administer SBIR/STTR awards, and create and
implement policies and procedures to prevent
fraud, waste and abuse in the SBIR/STTR program.
To capitalize on Office of Inspector General (OIG)
expertise in this area, agencies must consult with
their OIG when creating such policies and
procedures.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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To educate small business concerns (SBCs) and increase
awareness about FWA, the DON SBIR/STTR Programs
have implemented the following:
•
FWA webpage:
https://navysbir.com/fwa.htm
•
FWA tutorial:
https://www.navysbir.com/links_forms.htm
•
Requirement for Principal Investigators (PIs) to
certify, on the Fraud, Waste, and Abuse Tutorial
Certification slide in the Phase I Kickoff briefing, that
they have read the Fraud, Waste, and Abuse Tutorial
and understand its content and implications
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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FRAUD
: Any false representation about a material fact or any
intentional deception designed to deprive the United States
unlawfully of something of value or to secure from the
United States a benefit, privilege, allowance, or consideration
to which an individual or business is not entitled.
•
WASTE:
Extravagant, careless, or needless expenditure of
Government funds, or the consumption of Government
property that results from deficient practices, systems,
controls, or decisions.
•
ABUSE:
Any intentional or improper use of Government
resources, such as misuse of rank, position, or authority or
resources.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Affirmative statements that the information the SBC
provided is true, and that the SBC will follow, is following, or
has followed the various requirements of the programs.
•
The Government relies on these certifications when making
its decisions, including whether to make an award.
Example:
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Not 51% (or more) owned by an entity that meets
the small business requirements
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Not meeting SBA size requirements (less than 500
employees including affiliates)
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Not having adequate facilities to perform the
required work
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Does not primarily employ the PI listed in the
proposal
•
Subcontracts require Government approval
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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DON will not make awards that duplicate or
substantially overlap research funded by other
federal agencies, or public or private entities.
•
You must disclose whether your company has:
─
Received awards for related work, or
─
Submitted or intends to submit proposals for similar work
to any other program.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Document your budget estimates
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Retain subcontractor/vendor quotations
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Notify the Contracting Officer if circumstances change
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Post-Award: document your expenditures
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If any budget items were disapproved upon award, do not spend
contract funds on those items
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Account for award funds –
tracked separately from other funds
!
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Keep good records: receipts, invoices, statements, time records
Track DON project time separately from other time!
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Under Phase II, report actual expenditures accurately!
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Accurate recordkeeping is the key to protecting the SBC
and its responsible parties from the potentially
detrimental consequences of FWA.
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Record and keep:
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timesheets for hours worked by
ALL
involved employees.
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all
financial receipts, invoices and statements for expenses
related to the project.
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applicable laboratory notebooks from research institutions
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agreements for use of research facilities.
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research institution personnel logs on project assistance by
staff and/or students.
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project status updates, including successes/failures.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Fixed Amount Award
≠
Free Money.
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You are responsible for the proper use of funds.
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DON anticipates that the full award amount will be paid
without regard to the actual cost subsequently incurred.
Payment of this amount, however, is subject to
compliance with the award terms and conditions.
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If estimated total expenditures are significantly less than
the award amount, DON reserves the right to renegotiate
the amount of this award.
•
You can only spend DON award funds on the project
and allowable costs!
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Allowable costs do not include:
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Personal credit card debt
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Vacations
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Home mortgage payments
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Childcare bills
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A spouse’s or employees’ speeding tickets
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A new home
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Personal investments
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Personal car repairs and maintenance
─
Jewelry and clothing
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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Indirect costs are
not
a piggybank.
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An SBC can spend legitimate indirect cost money on any
general business expenses not prohibited by the BAA or
contract conditions.
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However,
legitimate
indirect costs are a percentage of
legitimate
direct costs.
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An SBC
cannot
charge indirect costs on
unallowable
direct costs.
•
An SBC
cannot
charge fringe benefits for
unallowable
salary charges.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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SBIR: at least two-thirds of the work must be
performed by the SBC in Phase I and at least one-half of
the work in Phase II.
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STTR: for both Phase I and II, at least 40% of the work
must be performed by the SBC and at least 30% of the
work must be performed by a
single partnering
Research Institution.
•
Work performed in a university lab is NOT performed
by the company – even if it is performed by the PI –
unless there is a formal agreement in place!
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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SBIR: PI’s primary employment must be with the SBC at
the time of award, and throughout the award period.
Primary employment is defined as 51% employed by
the SBC. Full time work week is normally 40 hours;
employment elsewhere of greater than 19.6 hours is in
conflict with this requirement.
•
STTR: PI may be employed with the firm or the
Research Institution.
•
Change of PI requires written request to the
Contracting Officer
followed by
written approval.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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The content of the technical proposal must represent the
SBC’s work and ideas; including the work of others, without
their consent or acknowledgement, is plagiarism and will be
forwarded for criminal investigation.
•
Letters of Support:
─
Must refer to a specific proposal, should be dated, and cannot
be reused!
─
Must provide a contact that is reachable at the contact
address provided and be aware that they supported the
proposal in which their letter appeared.
─
Fabricated letters of support, or letters modified without the
signatory’s knowledge or consent, are false statements.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
For reporting fraud via the
qui tam
provision of the False Claims Act,
whistleblowers can receive up to 30% of any judgment award.
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Lying to Obtain an SBIR/STTR Contract or Lying about
the Work Performed
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Criminal Prosecution
─
False Statements: 18 USC §1001 ‒ 5 yrs in prison, forfeiture, $250K
fine
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Theft of Federal Property: 18 USC §641 ‒ 10 yrs in prison,
forfeiture, $250K fine
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Wire Fraud: 18 USC §1343 ‒ 20 yrs in prison, forfeiture, $250K fine
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Criminal Forfeiture
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Full amount of grant/contract
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Possible seizure of personal assets to satisfy forfeiture or fine
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
For reporting fraud via the
qui tam
provision of the False Claims Act,
whistleblowers can receive up to 30% of any judgment award.
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Lying to Obtain an SBIR/STTR Contract or Lying about
the Work Performed
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Civil Liability
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Treble (3x) actual damages
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Fine of up to $11,000 for each false claim (for example, payments
received (1) when the Government relied upon false information in
the SBIR/STTR proposal, (2) in a certification of current cost or
pricing data, (3) in a request for payment or (4) in progress reports)
─
Civil liability damages may be imposed in addition to criminal
prosecution per Civil False Claims Act, 31 USC §§3729-3733
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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In addition to Criminal and Civil Liabilities, the
Government can implement administrative
remedies to:
•
terminate contracts tainted by fraud.
•
debar the related SBC, owner, and/or employees
from SBIR/STTR programs (typically for 3 years).
•
prohibit the relevant SBC from receiving any
federal contracts.
•
prohibit the relevant people from working as
subcontractors on federal contracts.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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DO
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Include only truthful information in
proposals re: company size, facilities,
personnel, consultants, subawards,
supporters, etc.
●
Include only truthful certifications as to
eligibility requirements at each phase of
the award, from proposal to reports.
●
Read the applicable rules and follow
them. Certify on multiple occasions that
you have done so.
●
If you have questions, ask the
Contracting Officer!
DON’T
●
Certify to things you aren’t sure about
(or know to be false).
●
Make up bios or publications for people
in proposals.
●
Plagiarize, fabricate, or falsify text or
figures in proposals or reports.
●
Describe in proposals facilities,
equipment or employees that you don’t
have.
●
Alter or fabricate letters of support.
●
Create fake accounting documents.
●
Use award funds for personal expenses
(except for allowed profit and
legitimately earned salary).
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
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The Department of the Navy:
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Takes occurrences of FWA seriously.
•
Continues efforts to prevent FWA.
•
Hosts an SBIR/STTR FWA webpage to promote awareness
here
navysbir.com/fwa.htm
.
•
Provides an online
Fraud, Waste, and Abuse Tutorial
to
educate SBCs here
navysbir.com/links_forms.htm
.
Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
The Fraud, Waste, and Abuse Tutorial Certification outlines the critical aspects small businesses must understand to prevent fraudulent activities in SBIR/STTR programs. It covers statutory requirements, definitions, consequences of fraud, and administrative remedies. It emphasizes the importance of compliance and the potential legal implications of fraudulent behavior.
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Fraud, Waste, and Abuse Fraud, Waste, and Abuse Tutorial Certification Tutorial Certification I, the Corporate Official for the firm named below, certify that I have read and understand the Fraud, Waste, and Abuse Tutorial included in the following slides and acknowledge the criminal consequences, civil liabilities, and administrative actions that may result from a conviction of SBIR/STTR-related fraud. <Name> <Firm Name> <Title> <Date>
Fraud, Waste, and Abuse Fraud, Waste, and Abuse Tutorial Instructions Tutorial Instructions Signature on page 1 indicates agreement with the certification statement shown. Save completed file as a PDF and upload it to: https://www.navysbirprogram.com/navydeliverables/ in accordance with due date requirements specified in the DON SBIR/STTR contract. Use the FWA Certification deliverable label during the upload process. Email a copy of the file to the Technical Point of Contact (TPOC) identified in the contract. Maximum file size is limited to 25MB.
Department of the Navy Department of the Navy SBIR/STTR Programs SBIR/STTR Programs Fraud, Waste, and Abuse (FWA) Fraud, Waste, and Abuse (FWA) Tutorial for Small Businesses Tutorial for Small Businesses April 2021 Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Tutorial Topics Tutorial Topics Statutory Requirements Education and Awareness Definitions Certifications Areas for Potential Fraud, Waste, and Abuse Consequences of Committing Fraud Administrative Remedies Quick Reference Summary Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Statutory Requirements Statutory Requirements 15 USC 638 (k)(2) 638(k)(2): a database to be used exclusively for SBIR and STTR program [ 638(k)(2)(G)] includes a timely and accurate list of any individual or small business concern (SBC) that has participated in the SBIR program or STTR program that has been (i) convicted of a fraud-related crime involving funding received under the SBIR program or STTR program; or (ii) found civilly liable for a fraud-related violation involving funding received under the SBIR program or STTR program. evaluation that Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
SBA Policy Directive SBA Policy Directive Requirements Requirements 2019 SBA SBIR/STTR Policy Directive (9)(f)(1): Agencies shall evaluate risks of fraud, waste, and abuse in each application, monitor and administer SBIR/STTR awards, and create and implement policies and procedures to prevent fraud, waste and abuse in the SBIR/STTR program. To capitalize on Office of Inspector General (OIG) expertise in this area, agencies must consult with their OIG when creating such policies and procedures. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Education & Awareness Education & Awareness To educate small business concerns (SBCs) and increase awareness about FWA, the DON SBIR/STTR Programs have implemented the following: FWA webpage: https://navysbir.com/fwa.htm FWA tutorial: https://www.navysbir.com/links_forms.htm Requirement for Principal Investigators (PIs) to certify, on the Fraud, Waste, and Abuse Tutorial Certification slide in the Phase I Kickoff briefing, that they have read the Fraud, Waste, and Abuse Tutorial and understand its content and implications Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Definitions Definitions FRAUD: Any false representation about a material fact or any intentional deception designed to deprive the United States unlawfully of something of value or to secure from the United States a benefit, privilege, allowance, or consideration to which an individual or business is not entitled. WASTE: Extravagant, careless, or needless expenditure of Government funds, or the consumption of Government property that results from deficient practices, systems, controls, or decisions. ABUSE: Any intentional or improper use of Government resources, such as misuse of rank, position, or authority or resources. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Certifications Certifications Affirmative statements that the information the SBC provided is true, and that the SBC will follow, is following, or has followed the various requirements of the programs. The Government relies on these certifications when making its decisions, including whether to make an award. Example: Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential Fraud, Areas for Potential Fraud, Waste, and Abuse Waste, and Abuse The following slides include a sample of areas The following slides include a sample of areas where FWA could occur. where FWA could occur. It is not a comprehensive list. It is not a comprehensive list. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Not Meeting SBIR/STTR Eligibility Not Meeting SBIR/STTR Eligibility Requirements Requirements Not 51% (or more) owned by an entity that meets the small business requirements Not meeting SBA size requirements (less than 500 employees including affiliates) Not having adequate facilities to perform the required work Does not primarily employ the PI listed in the proposal Subcontracts require Government approval Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Multiple Agency Payments Multiple Agency Payments DON will not make awards that duplicate or substantially overlap research funded by other federal agencies, or public or private entities. You must disclose whether your company has: Received awards for related work, or Submitted or intends to submit proposals for similar work to any other program. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Recordkeeping Recordkeeping Document your budget estimates Retain subcontractor/vendor quotations Notify the Contracting Officer if circumstances change Post-Award: document your expenditures If any budget items were disapproved upon award, do not spend contract funds on those items Account for award funds tracked separately from other funds! Keep good records: receipts, invoices, statements, time records Track DON project time separately from other time! Under Phase II, report actual expenditures accurately! Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Recordkeeping Recordkeeping Accurate recordkeeping is the key to protecting the SBC and its responsible parties from the potentially detrimental consequences of FWA. Record and keep: timesheets for hours worked by ALL involved employees. all financial receipts, invoices and statements for expenses related to the project. applicable laboratory notebooks from research institutions agreements for use of research facilities. research institution personnel logs on project assistance by staff and/or students. project status updates, including successes/failures. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Firm Fixed Price Awards Firm Fixed Price Awards Fixed Amount Award Free Money. You are responsible for the proper use of funds. DON anticipates that the full award amount will be paid without regard to the actual cost subsequently incurred. Payment of this amount, however, is subject to compliance with the award terms and conditions. If estimated total expenditures are significantly less than the award amount, DON reserves the right to renegotiate the amount of this award. You can only spend DON award funds on the project and allowable costs! Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Costs Costs Allowable costs do not include: Personal credit card debt Vacations Home mortgage payments Childcare bills A spouse s or employees speeding tickets A new home Personal investments Personal car repairs and maintenance Jewelry and clothing Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Indirect Costs Indirect Costs Indirect costs are not a piggybank. An SBC can spend legitimate indirect cost money on any general business expenses not prohibited by the BAA or contract conditions. However, legitimate indirect costs are a percentage of legitimate direct costs. An SBC cannot charge indirect costs on unallowable direct costs. An SBC cannot charge fringe benefits for unallowable salary charges. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Work Requirements Work Requirements SBIR: at least two-thirds of the work must be performed by the SBC in Phase I and at least one-half of the work in Phase II. STTR: for both Phase I and II, at least 40% of the work must be performed by the SBC and at least 30% of the work must be performed by a single partnering Research Institution. Work performed in a university lab is NOT performed by the company even if it is performed by the PI unless there is a formal agreement in place! Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA PI Work Requirements PI Work Requirements SBIR: PI s primary employment must be with the SBC at the time of award, and throughout the award period. Primary employment is defined as 51% employed by the SBC. Full time work week is normally 40 hours; employment elsewhere of greater than 19.6 hours is in conflict with this requirement. STTR: PI may be employed with the firm or the Research Institution. Change of PI requires written request to the Contracting Officer followed by written approval. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Areas for Potential FWA Areas for Potential FWA Technical Proposal Content Technical Proposal Content The content of the technical proposal must represent the SBC s work and ideas; including the work of others, without their consent or acknowledgement, is plagiarism and will be forwarded for criminal investigation. Letters of Support: Must refer to a specific proposal, should be dated, and cannot be reused! Must provide a contact that is reachable at the contact address provided and be aware that they supported the proposal in which their letter appeared. Fabricated letters of support, or letters modified without the signatory s knowledge or consent, are false statements. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Consequences of Consequences of Committing Committing Fraud Fraud Lying to Obtain an SBIR/STTR Contract or Lying about the Work Performed Criminal Prosecution False Statements: 18 USC 1001 5 yrs in prison, forfeiture, $250K fine Theft of Federal Property: 18 USC 641 10 yrs in prison, forfeiture, $250K fine Wire Fraud: 18 USC 1343 20 yrs in prison, forfeiture, $250K fine Criminal Forfeiture Full amount of grant/contract Possible seizure of personal assets to satisfy forfeiture or fine For reporting fraud via the qui tam provision of the False Claims Act, whistleblowers can receive up to 30% of any judgment award. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Consequences of Consequences of Committing Committing Fraud Fraud Lying to Obtain an SBIR/STTR Contract or Lying about the Work Performed Civil Liability Treble (3x) actual damages Fine of up to $11,000 for each false claim (for example, payments received (1) when the Government relied upon false information in the SBIR/STTR proposal, (2) in a certification of current cost or pricing data, (3) in a request for payment or (4) in progress reports) Civil liability damages may be imposed in addition to criminal prosecution per Civil False Claims Act, 31 USC 3729-3733 For reporting fraud via the qui tam provision of the False Claims Act, whistleblowers can receive up to 30% of any judgment award. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Administrative Remedies Administrative Remedies In addition to Criminal and Civil Liabilities, the Government can implement administrative remedies to: terminate contracts tainted by fraud. debar the related SBC, owner, and/or employees from SBIR/STTR programs (typically for 3 years). prohibit the relevant SBC from receiving any federal contracts. prohibit the relevant people from working as subcontractors on federal contracts. Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Quick Reference Quick Reference DO DON T Include only truthful information in proposals re: company size, facilities, personnel, consultants, subawards, supporters, etc. Certify to things you aren t sure about (or know to be false). Make up bios or publications for people in proposals. Include only truthful certifications as to eligibility requirements at each phase of the award, from proposal to reports. Plagiarize, fabricate, or falsify text or figures in proposals or reports. Describe in proposals facilities, equipment or employees that you don t have. Read the applicable rules and follow them. Certify on multiple occasions that you have done so. Alter or fabricate letters of support. If you have questions, ask the Contracting Officer! Create fake accounting documents. Use award funds for personal expenses (except for allowed profit and legitimately earned salary). Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
Fraud, Waste, and Abuse Fraud, Waste, and Abuse (FWA) Summary (FWA) Summary The Department of the Navy: Takes occurrences of FWA seriously. Continues efforts to prevent FWA. Hosts an SBIR/STTR FWA webpage to promote awareness here navysbir.com/fwa.htm. Provides an online Fraud, Waste, and Abuse Tutorial to educate SBCs here navysbir.com/links_forms.htm. Report suspected or detected FWA to: www.secnav.navy.mil/ig/Pages/ComplaintProcedure.asp or https://www.ncis.navy.mil/Resources/NCIS-Tips/ Distribution A - Approved for Public Release | Office of Naval Research DCN #: 43-7334-20
