Louis Scutellaro

Competing contractors snagged two orders from federal purchasers after pitching gooseneck desk lamps at a bargain-basement price through a Web site of the U.S. General Services Administration.

Puzzled by the low price, Louis Scutellaro, owner and president of Mario Industries in Roanoke, researched the lamp, its specified manufacturer and import shipping records and determined that the product was made in China -- a detail that turned out to violate a provision of the Trade Agreements Act.

It's not clear whether the orders involved stimulus money, but Scutellaro said his experiences tracking the lamps' origins raised concerns about how stimulus money could be easily misspent on foreign-made goods.

The contractors had listed the lamps with an ARRA icon -- which is supposed to signal that the products were in compliance with guidelines of the American Recovery and Reinvestment Act. The icon does not necessarily mean that the federal buyers who responded are spending stimulus money to acquire the lamps, according to Caren Auchman, press secretary for the GSA. She said the GSA's recovery funds were not involved.

Scutellaro said one purchaser would have been a U.S. Air Force base in Charleston, S.C., and the other a Boston office of the U.S. Environmental Protection Agency. GSA describes its Advantage Web site as "a one-stop online resource for thousands of federal employees worldwide" that "offers the most comprehensive selection of approved products and services from GSA contracts."

The gooseneck lamp manufacturer listed in both cases was Grandrich Corp. in California, which was not a contractor listing the lamps. Scutellaro acknowledged it is possible Grandrich was not aware its lamp was being promoted as U.S. made.

Fun Chang at Grandrich said, "We never received the order, either." He declined additional comment.

Scutellaro said he complained to the relevant EPA and Air Force contracting offices and to the GSA and the two contracts were subsequently canceled and have not yet been rebid.

Auchman confirmed that the contracts were canceled and said GSA has contacted contractors who have listed the offending products from Grandich and that they are removing the items from the Web site.

Scutellaro wonders now about what sort of due diligence GSA conducts to investigate the origin of goods promoted for ARRA-backed federal purchases and otherwise listed by the GSA as "approved products."

"The problem is, GSA is overwhelmed by the process and can't police it," Scutellaro said. "And they're not really interested in policing it. They're secure in their jobs and not really concerned about the American worker."

Auchman disagreed. The GSA is not overwhelmed, she said. And it does care about American workers.

"We can't vette everything on the front end," she said.

The sheer number of products on its Web site precludes the GSA from being able to investigate the eligibility of each one, Auchman said. Instead, she said, GSA must operate from a position of trust that companies will self-certify honestly.

And if they do not, she said, the GSA relies on industry representatives and even small businesspeople like Scutellaro to raise a red flag. She noted also that GSA reacted by ensuring that the ineligible products are removed from its Web site.

Scutellaro responded, "They are taking them off because I yelled and screamed for two months."

Scutellaro said his lamp investigation was time consuming. He worries that regional manufacturers might lose out on federal contracts for similar reasons but not know enough about the GSA process or have enough time to play a watchdog role.

"Other manufacturers need to know about this," he said. "There is so much fraud out there that this is just scratching the surface."

Meanwhile, Mario Industries is another example of a regional company with an interesting history and little local name recognition.

The company was founded by Scutellaro's grandfather, Mario Russo, in 1922 in New York City. It moved to Roanoke in 1988 and manufactures lamps and lighting fixtures. Today, about 80 percent of its sales are to the hospitality industry; retailers account for most of the balance.

The recession has battered both of those customers. Scutellaro said sales have dropped about 30 percent. And foreign competition has long been a foe. Mario Industries has adapted by offering niche products, including very large lamp shades too vulnerable to safely ship from overseas, by accepting smaller orders from hotels and restaurants and by cutting costs.

But times have been tough.

Several years ago, Mario Industries had about 100 employees. Today, it has 40, and remaining manufacturing operations seem lost in the company's 90,000 square-foot building off Patterson Avenue. It also has a 60,000 square-foot warehouse in Vinton.

To boost sales, Scutellaro said the company decided to actively bid federal contracts on the GSA Advantage Web site. And Mario Industries redesigned and reworked its products and sent them off for testing to meet the criteria for an Energy Star rating.

The company does outsource some lighting offerings or key components, but Scutellaro said any products pitched for stimulus money meet Buy American guidelines, which allow some parts to be manufactured outside the U.S.

Mario Industries intends to bid on other federal orders.

And Scutellaro said there is good news to report.

"We've landed a contract as sole supplier for a major hotel chain," he said recently.

On the Net: www.gsaadvantage.gov www.recovery.gov