Air Force Restores Eligibility to Controversial Contractor

The Air Force on Friday quietly ended its three-week suspension of the reverse-auction company FedBid, the contractor announced, removing a threat that the Vienna, Va., firm would face suspension and debarment.

On Jan. 29, the Air Force had moved to place FedBid on the Excluded Parties List System in reaction to a September 2014 Veterans Affairs Department inspector general report finding that Susan Taylor, deputy chief procurement officer of the Veterans Health Administration Procurement and Logistics Office, had a conflict of interest in promoting the work of FedBid and sought to discredit a VA official during the 2010-2013 period.

Taylor retired in October following demands from Rep. Mike Coffman, R-Colo., and others that she be fired.

This Friday, Air Force officials notified FedBid that it has been taken off the Excluded Parties List System based on an administrative agreement signed between the company and the Air Force. The company also announced that its founder and board chairman, Ali Sadaat, resigned on Feb. 5, one of the requirements of the agreement.

“We appreciate U.S. Air Force officials moving expeditiously on their review and consideration,” said a statement from FedBid CEO Joe Jordan, who until January 2014 headed the White House Office of Federal Procurement Policy. “Through that process, FedBid was able to demonstrate that we took seriously their concerns and that we have taken substantive actions to address those concerns. We will continue to work with USAF, within the terms of our administrative agreement, to ensure the highest possible commitment to the integrity and transparency of our operations and our entire FedBid team. We look forward to continuing to provide an innovative online marketplace that helps both buyers and sellers achieve their goals through increased competition, transparency, and efficiency.”

The administrative agreement was reached only after the online marketing firm carried out a major reorganization in its top ranks. According to a company timeline, FedBid responded to the VA inspector general report by appointing a three-member in-house review panel. That body in turn retained the law firm of Arnold & Porter LLP to conduct an independent review of the watchdog’s findings. “That review found no apparent violations of law or regulation by FedBid or its representatives,” FedBid said in a release. However, it did “raise concerns about the culture within FedBid,” particularly how the company’s representatives handled third-party relationships.

Based on the law firm’s recommendations, FedBid strengthened its ethics program by counseling employees, having them sign a code of conduct and appointing a chief compliance officer. The company also created an Ethics and Compliance Steering Committee to oversee enforcement of compliance and training.

Jordan, who had been president of the company’s public sector unit, became CEO on Jan. 1.

The Air Force did not respond to requests for comment.