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Set-Asides and Preferences

This archive displays posts tagged as relevant to fraud in government contracting set-aside and preference programs. You may also be interested in the following pages:

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September 4, 2019

New Hampshire-based North American Specialty Insurance Company (NASIC) has agreed to pay $1 million to settle allegations of violating the False Claims Act by providing bonding to South Carolina general contractor Claro Company, Inc., despite having actual or constructive notice that Claro was making false and fraudulent statements to claim certification as a small business owned and controlled by socially and economically disadvantaged individuals under the Small Business Administration Section 8(a) Business Development Program.  By turning a blind eye, NASIC enabled Claro Company to continue bidding for set-aside contracts under the 8(a) program.  USAO WDNC

August 20, 2019

Luke Hillier, the majority owner and former CEO of defense contractor ADS, Inc., will pay $20 million to resolve claims that he caused the submission of false claims to the government by fraudulently representing that the company qualified as a small business concern eligible for federal contracts reserved for such businesses.  In 2017, ADS and another company officer paid $16 million to resolve claims from the same conduct, bringing the government's total recovery to over $36 million.  The case was initiated by a whistleblower complaint filed by Ameliorate Partners, LLP, which will receive $3.6 million of the Hillier settlement. DOJ

August 16, 2019

Sunrise Systems of Brevard, Inc. will pay $500,000 to resolve charges that in a contract to perform demolition work for NASA, Sunrise claimed that it would partner with V&R Enterprises, making Sunrise eligible to receive Small Business Administration funding.  In fact, Sunrise performed nearly all of the work, violating SBA labor and work requirements.   USAO MD FL

August 13, 2019

Classic Site Solutions, Inc. (CSS), a Massachusetts-based construction management company, and owner Cheryl Sady, have agreed to pay $1.3 million to settle allegations that CSS’s conduct between 2009 and 2015 violated the False Claims Act.  In order to access government contracts set aside for companies located in Historically Underutilized Business Zones (HUBZones), CSS and Sady allegedly submitted false statements to the Small Business Administration (SBA) indicating their principal office was located in a HUBZone, which allowed them to fraudulently bid on and win contracts worth millions of dollars.  USAO CT

June 28, 2019

Following his conviction for illegally obtaining $11 million in contracts intended for service-disabled veteran-owned small businesses, a government contractor and his company have been ordered to pay $3.2 million, with $400,000 to be paid by the contractor, Andrew Otero, and $1.8 million to be paid by his company, A&D General Contracting.  Otero has also been sentenced to 1.5 years in prison.  USAO SDCA

Fraud in GSA Contracts: How to Report it Under the False Claims Act for a Whistleblower Reward

Posted  05/13/19
Entrance to General Services Administration building, with carved eagle over door
Federal government offices purchase all the products and services any office does: office supplies, telecommunications equipment and services, computer hardware and software, consulting services, vehicles, travel services, and so on. The General Services Administration is the centralized procurement arm for the federal government, overseeing tens of billions of dollars in procurement annually, as well as handling...

May 1, 2019

An Alaska Native Corporation that qualified for the Small Business Administration’s set aside contracts has agreed to pay $2 million to settle a whistleblower’s allegations that it paid kickbacks to obtain said contracts.  According to a qui tam complaint by Susann Campbell, Kikiktagruk Inupiat Corporation (KIC), and its subsidiary, KIC Development LLC (KICD), paid bribes to a contract employee with the U.S. Army Corp of Engineers in order to obtain preferential treatment and confidential government information to ensure it won a construction contract at the military’s Ft. Bliss installation in Texas.  USAO WDTX

February 21, 2019

Body armor manufacturer Survival Armor, Inc., will pay $900,000 to resolve claims that it falsely claimed to qualify as a small business to secure a five-year small business set-aside contract to provide tactical body armor to the Department of Homeland Security.  The company is, in fact, a subsidiary of a large foreign parent company, and not a small business.  USAO MD FL

December 21, 2018

The construction company of F.H. Paschen, S.N. Nielsen & Associates LLC will pay $2 million to settle allegations under the Illinois False Claims Act that it evaded requirements that it meet participation levels for certified small/minority/women-owned businesses on two contracts with the Metropolitan Water Reclamation District of Greater Chicago.  FHP was alleged to have falsely represented that a minority-owned business, Vargas Mechanical, Inc., would perform the work, in order to secure the contracts.  IL AG

December 19, 2018

Arvco Container Corporation of Kalamazoo, Michigan, will pay $400,000 to settle allegations that it violated the False Claims Act by performing 100% of the manufacturing work on a contract that had been awarded by the Defense Logistics Agency to Fibre Technologies LLC in Reading, Pennsylvania, subject to a HUBZone small business program that barred Fibre from subcontracting the entire manufacturing.  USAO MD Pa
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