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Parts Plus; is it a scam?

Andrew.E

Plastic
Joined
Dec 22, 2011
Location
Independence, OR, USA
This is an update to this thread. I figured I'd start a new one so as not to resurrect such an old thread.

TL/DR: There's a company out of California called Parts Plus that will cold call you and ask you to pay money to bid on government work. Are they a scam? Well, read on.

About this time in 2011, we were contacted by Parts Plus, specifically by Jim, the owner. He claimed to have a plating and finishing shop, and he told us that he acts as a middle man for government contract work. He will hold our hand and get us all set up to do government bidding for a fee. Sounds like a scam to me! But, after a little more research, including verifying his corporate charter with the State of California, verifying his business license with the city, checking up on his BBB file, and calling a dozen of his supplied references, I was satisfied enough to proceed and see how far it went.

Fast forward to August 2012. We've been quoting a seemingly endless stream of government jobs. We get about 3-5 jobs a week to cherry pick through and quote on. So far nothing has materialized. Suddenly we hear back from Parts Plus that we've had an accepted bid from General Dynamics for an order of 1,100 parts to the tune of $45- each. Great! Let's go!

Suddenly, we're being asked to pay another $2500. Okay, now this is starting to sound suspicious. Why the extra money? Why all of the sudden? Well, in order to get the job we must be ITAR certified. All of this is without a purchase order in hand. It doesn't make me feel very warm and fuzzy on the inside. Additionally, Jim (the owner) won't let me see any communication between him and General Dynamics. According to him, this is to protect his sources because he doesn't want any of his customers to bypass him and go straight to the source. Makes sense, it just seems odd that almost exactly a year later he comes knocking with a job that requires another $2500 payment before we can see a PO or have any contact with the end customer.

I'll keep everyone who's interested posted on the progress of this. As of this morning I've asked him to print out the email exchange with his contact at GD which shows that "they've accepted the bid and it's ready to go! All we need is to get you ITAR certified" (that's a direct quote from one of his emails) and redact the email address, since he insists on being so secretive, and fax me a copy.

We'll see if he delivers. :reading:
 
Seems easy enough to figure out if it is a scam. Offer to get ITAR certified elsewhere (via some third party.) If that's acceptable, then probably not a scam. If they're the only ones that can do the "cert"...
 
Click: Meaning of ITAR Compliant and ITAR Certified

No where in the International Traffic in Arms Regulations (ITAR) is it spelled out what “ITAR compliant” means. If you speak to different staff members of the Directorate of Defense Trade Controls (DDTC), you may get slightly different answers, but this “not for attribution” acceptable, generally safe definition of ITAR compliant is as follows:



For a company involved in the manufacture, sale or distribution of goods or services covered under the United States Munitions List (USML) or a component supplier to goods covered under USML, the contractual stipulation or requirement of being “ITAR compliant” means that the company must be registered with the State Department’s DDTC, if required, as spelled out on DDTC’s web site Registration on US State Directorate of Defense Trade Control website and the company must understand and abide by the ITAR as it applies to their USML linked goods or services. The company themselves is certifying that they operate in accordance with the ITAR when they accept being a supplier to the USML prime exporter.



In other simpler words, to be ITAR COMPLIANT, a company (USML supplier) needs to register with DDTC and know what is required of them to be in compliance with the ITAR and self certify that they possess this knowledge. This explanation does not constitute legal advice and is not for attribution. If in doubt as to how this concept applies to your company, you should seek legal advice.


Sounds like it doesn't take $2500 of effort on your part, if you did it yourself.

Did they ever explain you would be producing weapons components?

http://www.pmddtc.state.gov/
 
So.. does that guy have a service to ITAR certify your shop for that $2500, or is it one of those " if you pay we'll bypass that paperwork " type deal?

Either way, I've never been much into any of those " give me money and I'll make you rich " schemes...


But if you are still having doubts in a month, for a small non-refundable fee of $499.99 I'll happily tell you if its a scam or not.
 
I'm confused, this "guy" set you up to "do" government work, so you are bidding through him?????

Scam, every which way to Sunday. Scam.

I'd tell him the check is in the mail, fax over the purchase order.
 
I'm confused, this "guy" set you up to "do" government work, so you are bidding through him?????

Scam, every which way to Sunday. Scam.

I'd tell him the check is in the mail, fax over the purchase order.

Probly right.... you quoted a price to him and he's doing the plating etc??
Your NOT doing Gvmt work.... HE is... Maybe...

Suddenly we hear back from Parts Plus that we've had an accepted bid from General Dynamics for an order of 1,100 parts to the tune of $45- each. Great! Let's go!

Did YOU quote GD? or quote Parts +

It used to be when I did Navy work that any contract / PO (Purchase Order) with an anticipated value of $25,000 or more was published in the Commerce Biz Daily... and was a IFB... Invitation FOR bid... If lesss that 25k... it could be one of several classes of Purchase Orders and thus not requiring a IFB procedure.... Anyone doing Gvmt work confirm this ??

And one more thing.... If you quited General Dynamics... when did that become GVMT WORK?? GD may sell the part to the GVMT... but as far as YOU are concerned, GD is just another commercial customer.

There was a GVMT Contracting Officer on the board here at one time, maybe he'l straighten this out.

Did YOU keep a copy of ALL of the bid you made? and the regulations you said you had in place to fullfill ALL the terms and conditions of the contract/PO ??.... Did you READ every word of it???
 
Click: Meaning of ITAR Compliant and ITAR Certified




Sounds like it doesn't take $2500 of effort on your part, if you did it yourself.

Did they ever explain you would be producing weapons components?

U.S. State Department - Policy - Directorate of Defense Trade Controls

Yes, if it is for weapons, you may be required to register with the Dept. of State. You would have to sign the paperwork and I would imagine pay the $2250 registration fee yourself. If he wants you to pay him, that does not make any sense.
 
Yeah, a rodent with a big boat payment coming due... If you are really interested in government bids, the feds have some nice programs to help small business get into the bid process. A good place to start is with your local Small Business Development Center (Small Business Development Centers (SBDCs) | SBA.gov). I have done some military work as a sub and the story that I got was that this work generally takes a while to get going, is pretty competitive, and payment is on a well defined schedule.
 
ITAR is a tricky thing.

Register yourself. But be forewarned: registration is only the tip of the iceberg.

Export controls are a potential minefield. There are criminal liabilities. As in they come and put hand cuffs on you and take you to jail. Not just for your actions, but maybe for the actions of your employees.

You have to develop a training program for your employees, enforce it, and have a system in place for handling information, materials, and other assets related to the project. I didn't like sitting through 6 hours of training, but I'm glad I did.

Oh, and don't give tours to a foreign national if they can see the GD work. That's an export. As are any number of other seemingly mundane actions.

That registration fee is a YEARLY expense. Plan on spending another few grand to get a training program in place.

Is that mess worth it to you?
 
This sounds like a great deal to me, so long as one thing is true, and that is, NO MONEY changes hands between you and Parts Plus until such time as a parts contract has been completed and payment received. Pay him a flat fee, pay him a percentage of the contract value, that's all up to you. Fees for certification, for training, for whatever either party can come up with, are all negotiable. What is NOT open for negotiation is, NO payments to Parts Plus in anticipation of work that may or may not materialize.

Think about this for a minute. There are any number of really successful and prosperous shop owners on this forum. How many of these operators get money UP FRONT for nothing more than some nebulous promise? Do YOU? Read a few threads. The best that can be hoped for is COD. If Parts Plus is a successful and legitimate business, he will not only have the resources to carry the minimal expenditure of bringing you up to speed as a subcontractor but will also understand perfectly why this is as things should be. It sounds like this guy has already leaned the color of you rmoney. Shame on you. If he will not produce the contract without additional funds, write this off as a lesson learned and move on.

Steve

on edit: I did not see Dburnette's post, because I type slow. In light of what he said, I would be VERY careful here! Gary E gave you good advice, read everything in any contract you are considering bidding on. But don't just read; UNDERSTAND. If you're not sure, CHECK and verify.
 
And some of those relatively new regulations have made it so that quite a few things are plain no longer exported out of the US, either by being banned, or making it way too expensive and troublesome to do so. Good luck with growth.
 
I didn't read all the posts.. Can you put the $2500 in an escrow account which will get released to him, when this all works out? If not, you say how am I protected? If he doesn't want to do that tell him to tell his story walking.

Regards,

Stan-
 
With the bad economy hordes of people have jumped into government work, driving the prices you can win jobs to as low as 35% of 2005 levels on a lot of jobs. The reason why you didn't get any work so far is there is no meat on the bone to afford a middleman's mark up. Parts Plus is bidding against companies like yours going direct, which you could have done for a few hours of paperwork and no money. I gave up on government work, but when I was doing it I received RFQs from Part's Plus, then went and bid them direct. Their business model makes no sense in this economy. I think they survive by ripping people off, quit while you have only burnt $2500.
 
Don't know anything about this situation, as i don't do government work.

But i know this....Anytime i have to question IF something is a scam, i walk away. Haven't been scammed yet. Just a general rule i follow.

Hope it works out.
 
Been there, done that....

I paid Jim back in 2007 to join his service and get me set up with a cage code. He used to post jobs on his website that were super high profit. You see these jobs and think WOW this service could really be a "pot of gold", but in reality most of the jobs posted were "source control" and must be manufactured by a short list of suppliers which had pre-qualified their product by way of an extensive DATA PKG and First Article. I confronted him with this information and his response was to quote as an alternate bid. I have spoken with multiple buyers and now know there is NO chance of getting those jobs without the pre-qualification. When I was a member I quoted directly. If you are having to quote through him you open yourself up to fraud and deception. Everything he is charging you for you can do yourself for free and it's not as difficult as you are led to believe. I have found over the past few years that the DLA needs suppliers so they are very willing to do whatever it takes to help you succeed. As far as him owning a plating shop, I've been there and he has a lathe and mill that's it. He tries to do some of the work himself, anything to make a dollar. Going forward, most of the easy work is cheap and you better learn how to package by MIL standards or you will be paying someone else and eating up what little profit there is. But the upside is, there is a TON of opportunity if your willing to put in the effort......
This is an update to this thread. I figured I'd start a new one so as not to resurrect such an old thread.

TL/DR: There's a company out of California called Parts Plus that will cold call you and ask you to pay money to bid on government work. Are they a scam? Well, read on.

About this time in 2011, we were contacted by Parts Plus, specifically by Jim, the owner. He claimed to have a plating and finishing shop, and he told us that he acts as a middle man for government contract work. He will hold our hand and get us all set up to do government bidding for a fee. Sounds like a scam to me! But, after a little more research, including verifying his corporate charter with the State of California, verifying his business license with the city, checking up on his BBB file, and calling a dozen of his supplied references, I was satisfied enough to proceed and see how far it went.

Fast forward to August 2012. We've been quoting a seemingly endless stream of government jobs. We get about 3-5 jobs a week to cherry pick through and quote on. So far nothing has materialized. Suddenly we hear back from Parts Plus that we've had an accepted bid from General Dynamics for an order of 1,100 parts to the tune of $45- each. Great! Let's go!

Suddenly, we're being asked to pay another $2500. Okay, now this is starting to sound suspicious. Why the extra money? Why all of the sudden? Well, in order to get the job we must be ITAR certified. All of this is without a purchase order in hand. It doesn't make me feel very warm and fuzzy on the inside. Additionally, Jim (the owner) won't let me see any communication between him and General Dynamics. According to him, this is to protect his sources because he doesn't want any of his customers to bypass him and go straight to the source. Makes sense, it just seems odd that almost exactly a year later he comes knocking with a job that requires another $2500 payment before we can see a PO or have any contact with the end customer.

I'll keep everyone who's interested posted on the progress of this. As of this morning I've asked him to print out the email exchange with his contact at GD which shows that "they've accepted the bid and it's ready to go! All we need is to get you ITAR certified" (that's a direct quote from one of his emails) and redact the email address, since he insists on being so secretive, and fax me a copy.

We'll see if he delivers. :reading:
 








 
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