After several years of investigation and more than 200 complaints, the Florida Attorney General is taking action against infamous GSA ‘consultant’, The Federal Verification Co., Inc. dba GSA Applications, filing a complaint alleging multiple violations of the Florida Deceptive and Unfair Trade Practices Act. Among the allegations are charges that GSA Applications used its team of highly aggressive telemarketers to contact small businesses and falsely represent itself as the General Services Administration (GSA) or an affiliated entity to “guarantee [the small business] a GSA contract within a short time frame” in exchange for the payment of an up-front fee of up to $10,000. GSA Applications allegedly collected this fee without doing adequate reviews of contractors’ qualifications or ability to meet the requirements for award and would not return the fee if it subsequently found the company was not qualified to submit an offer. The Attorney General further alleges that GSA Applications made “false and misleading representations assuring government-guaranteed minimum revenues upon a contract award and a 100 percent guaranteed return on investment.”
While many in the government contracts industry have heard of ‘that company in Florida’ infamous for its business practices, the name Federal Verification Co. might not ring a bell. The reason is simple – the Attorney General found that GSA Applications has been using at least 60 different business names and over 50 websites. Based on my online research and experience talking to people who have been contacted by this company, they also operate out of numerous states – predominantly Florida and South Carolina. Additionally, the Department of Labor announced this week that the company had misclassified over a hundred inside sales employees as independent contractors, thus denying them of over $200,000 in wages owed under the federal minimum wage. In total, GSA Applications paid $280,768 in back wages and damages to resolve the findings.
Although the company name was constantly changing, the misleading and sometimes outlandish promises it made to potential clients were consistent, especially their 100% guarantee. I know I lost potential clients to that guarantee and their bargain-basement rates on more than one occasion. Clearly many companies are pulled in by these methods, as one of the websites affiliated with GSA Applications now boasts that they have gotten more than 1,700 Schedule contracts awarded. The continued deluge of offers from ‘applications’ companies on behalf of sometimes marginally-qualified companies is one of the factors that has made the process of obtaining and managing a GSA Schedule contract so much more difficult for everyone. Here is hoping that the Florida Attorney General can finally put an end to these unfair practices and protect small businesses across the country.
To contact the Florida Attorney General regarding suspicions of unfair or deceptive business practices, you can file a complaint online at www.myfloridalegal.com or by phone at (866) 966-7226 (in Florida) / (850) 414-3990 (out-of-state).