Oxebridge has confirmed with Maryland state officials and multiple non-profit attorneys that the CMMC Accreditation Body (CMMC-AB) is not a “tax-exempt” organization in that state. The confirmation further complicates matters for the CMMC-AB as the US Internal Revenue Service (IRS) previously confirmed that the CMMC-AB had not obtained tax-exempt status at the Federal level, either. These facts contradict a formal filing by the CMMC-AB in March of 2020 where it attested, under penalty of arrest, that it was already a tax-exempt organization.

In late 2020, the CMMC-AB was awarded a no-bid, sole-source contract with the US Dept. of Defense, granting it sole authority to act as the nation’s CMMC accreditation oversight organization. In order to obtain that contract, however, the CMMC-AB had to first apply with the Defense Logistics Agency (DLA) for a Commercial and Government Entity code, or “CAGE code.” A CAGE code is a mandatory requirement for any organization that expects to later be awarded a US Federal government contract. In March of 2020, the CMMC-AB filed its CAGE code application with DLA, and attached official “certifications and representations” paperwork attesting that it was already a “tax-exempt” organization. The CMMC-AB was not at that time a tax-exempt organization, nor is it as of this writing in May of 2021.

Filing fraudulent reps and certs documentation is punishable by fines and up to 5 years in prison. The paperwork was signed by the prior CMMC-AB Board Chair, Ty Schieber.

Once the revelation became public, the CMMC-AB pivoted its marketing and FAQ page to emphasize that the organization was formed as a “non-stock, not-for-profit organization” within the State of Maryland since January 2020. Sources reported that this was an attempt to build an argument that Schieber was being truthful when he filed the reps and certs documentation in early March 2020, and did so based on the company’s status in Maryland, not its IRS status. However, Oxebridge has now confirmed with Maryland officials and attorneys that while a company may file Articles of Incorporation claiming to be a “not for profit,” they may not legally claim to be “tax-exempt” until they are granted a specific tax-exempt certification within Maryland. The CMMC-AB has not obtained this certification in Maryland, since doing so requires that the CMMC-AB first obtain tax-exempt status at the Federal level, from the IRS.

The CMMC-AB has publicly admitted that it only filed for 501(c)(3) status in February of 2021, eleven months after the reps and certs document claimed they already held tax-exempt status.

The CMMC-AB’s FAQ page also claims that to obtain IRS 501(c)(3) status, the IRS requires “1 year of trailing financials.” Oxebridge has confirmed with the IRS that this is not a typical requirement, and that an organization may instead submit estimates of future revenue. There is no requirement for an organization to be operating for one year prior to applying for tax-exempt status.

Since that time, the CMMC-AB then allowed its CAGE code status in SAM.gov to lapse entirely, having failed to file a routine update in March of 2021. It then moved to make its entry in the CAGE code “Update Tracker” webpage private, and thus entirely invisible to the public. It is unclear if the CAGE code is active at this time, or not. Maintaining active registration in SAM.gov is another mandatory requirement for any government contractor.

Oxebridge has confirmed that the DOD’s Defense Criminal Investigative Services (DCIS) has launched an investigation into the CAGE code controversy, based on a complaint filed by Oxebridge in February 2021. At the same time, the Defense Logistics Agency has acknowledged that a separate Oxebridge complaint has been received and “accepted” by them, but it is unclear if this amounts to an investigation.

An additional criminal complaint has been filed with the DOD Inspector General against the CMMC PMO for “misuse of office and misuse of position,” specifically alleging that PMO officials used their office to promote the CMMC-AB and private consultants credentialed by it, while publicly denigrating persons and firms who were not credentialed by the AB. Government officials are prohibited to use their offices to promote private companies.

Despite these violations, neither the Office of the Undersecretary for Defense for Sustainment and Acquisition nor the CMMC Project Management Office (PMO) have taken any action to enforce the law, or investigate the CAGE code allegations. If it is determined that the CMMC-AB’s CAGE code was obtained fraudulently, it could force the DOD to cancel its sole award contract entirely, since that award would have been granted under fraudulent circumstances. If crimes were committed, the DOD would be required to refer those responsible to the DOJ for prosecution.

The CMMC-AB and DOD CMMC PMO are now subject to over 20 separate investigations, filings, and complaints, some alleging additional violations of Federal law. Despite this, the CMMC-AB has consistently ignored complaints filed with it, instead electing to attack critics during interviews with “friendly” news sources.

In December of 2020, Oxebridge filed a complaint alleging the CMMC-AB is in violation of the Americans with Disabilities Act. The DOD has mandated that CMMC assessors may only work in the industry after being trained by the CMMC-AB, thus denying disabled veterans the ability to eventually be employed as CMMC assessors. The CMMC-AB has ignored the complaint outright, and continues to deliver training that does not comply with ADA; it has only promised to ensure that “future” training will be ADA-compliant. The complaint is now with the Dept. of Justice.

The CMMC-AB has been plagued with conflict of interest accusations, as now seven current and former Board Directors have been traced to companies either selling CMMC related products or services, or working with companies pursuing CMMC certification. The Board has defended these actions by claiming not to understand their own Code of Ethics and conflict of interest policies, which new CEO Matt Travis described as “soaring with eagles.”┬áThose policies were crafted by an attorney hired by the CMMC-AB from the law firm Pillsbury, and then approved by the Board itself.

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