Bloomberg News

Veterans Agency Overturns Decision on Navy SEAL Denied Contracts

August 20, 2012

The Department of Veterans Affairs has overturned its decision rejecting a retired Navy SEAL from a contracting program designed to help veteran-owned businesses.

The agency told 23-year veteran Mark Lilly that Syncon LLC, his Chesapeake, Virginia-based construction company, is now allowed to compete for the contracts, according to a VA letter sent to him today. Lilly, 47, was shot in Afghanistan and has a Purple Heart, Silver Star and five Bronze Stars.

The VA has rejected the firm’s veteran-owned status three times this year. In June, it questioned whether Lilly, who has a Virginia contractor’s license, was in charge of the company’s daily operations as required by the department’s rules.

The VA concluded in the letter that Lilly “has adequate experience to manage and operate the business.” In its decision, the agency took note of his general contractor’s license and the updated resumes provided by Lilly and his non- veteran minority partner.

Lilly said the lost certification has cost his company the opportunity to bid on as much as $5 million in contracts. He spent most of July in Yemen providing security and project management services for an oil company to compensate for the lost revenue, he said.

“I’m very happy that we were able to succeed and I can get back to work here,” Lilly said in a phone interview.

Lawmakers’ Queries

The VA sent an official to visit Syncon offices on July 26, six days after a Bloomberg News story on Lilly’s rejection. Two congressional subcommittees held an Aug. 2 joint hearing on the agency’s new verification system, which has drawn complaints from veteran owners turned down during the same process.

The House Committee on Veterans Affairs, led by Representative Jeff Miller, a Florida Republican, and Senator Jim Webb and Senator Mark Warner, both Virginia Democrats, made inquiries about Lilly’s case in July.

More than 4,000 companies, or almost two-thirds of all those that have applied, have been rejected by the VA since the agency stepped up efforts last year to prevent fraud, according to March data from the VA. The department didn’t make more recent data available.

A 2010 law requires the VA to do more to ensure veterans are in control of a company. The stricter process followed reports of fraud in the program, including cases where veterans were “fronting,” or claiming to manage companies run by other people.

Lilly has said his case shows that the crackdown is harming legitimate businesses and may be hurting efforts to help returning troops find work amid high unemployment. He said he has experience in his field, including supervising some military base construction overseas.

The VA has said it was concerned about who was running Syncon in part because the retired SEAL’s minority partner, who isn’t a veteran, has more construction experience than Lilly.

“I was blessed to meet up with people that could help me,” he said. “I’m hoping the VA can move forward and do a better job, a more thorough job, because there are a lot of other vets out there who are going to need their help.”

To contact the reporter on this story: Kathleen Miller in Washington at Kmiller01@bloomberg.net;

To contact the editor responsible for this story: Stephanie Stoughton at sstoughton@bloomberg.net


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