Did Your Employer Actually Qualify For That Government Set-Aside It Received? Did Your Competition Win A Contract It Didn’t Deserve?

Check out the requirements below to see if the winning contractor met the criteria to be eligible. If it wasn’t, you may be eligible for a reward for reporting this fraud.

The set-aside and sole source programs offered by the Small Business Administration help companies obtained Government contracts that are owned by individuals who have been historically underrepresented in the free market or lack the economic ability to compete with larger companies

Lately, large companies and individuals who do not meet the criteria to be eligible for the programs have been taking advantage of the system in order to fraudulently obtain these contracts set-aside for specific small businesses. Past examples include such conduct as:

  • A large construction company discreetly forming a new small business, transferring a service-disabled veteran from his maintenance position to president of the business, then representing it as a service-disabled small business in order to secure government contracts despite actually controlling the business;
  • An aerospace company falsely certifying that it was a women-owned small business to secure a competitive advantage;
  • A group of information technology companies falsely certifying as a small business to obtain set-asides.

In these cases and others, companies have been forced to pay millions of dollars to the Government because whistleblowers came forward and exposed this fraud through the qui tam provisions of the False Claims Act.

The False Claims Act allows individuals to file a lawsuit on behalf the Government against companies that have defrauded the Government. If successful, the whistleblower is entitled to receive up to 30% of the recoveries.

Take a look at the requirements below to see how companies qualify for each Small Business Administration set-aside program. If you have evidence that your employer obtained a Government contract through one these programs by fraud, you may be eligible for a reward.

The 8(A) Business Development Program

The 8(A) Business Development program assists small businesses owned by disadvantaged individuals compete in obtaining Government contracts through business development assistance, sole-source contracts, joint-ventures, and other programs such as the Mentor/Protégé program.

To qualify for the program:

  • The business must be considered small based upon either the operating account or the number of firm employees;
  • The business must be majority-owned (at least 51%) and controlled by a United States citizen(s);
  • The owner(s)/controller(s) must be socially disadvantaged (defined as “Black Americans, Hispanic Americans, Native Americans, Asian Pacific Americans, [and] “Subcontinent Asian Americans); and
  • The owner(s)/controller(s) must be economically disadvantaged (defined as a socially disadvantaged individual(s) with diminished capital and limited credit opportunities which causes decreased ability to compete).

HUBZone Program

The Historically Underutilized Business Zones (“HUBZone”) Program helps small businesses in remote locations win Government contracts through set-asides or sole-source contracts and 10% price evaluation preference in full and open contract competitions.

To qualify for the program:

  • The business must be considered small by SBA standards according the North American Industry Code System;
  • The principal office must be located in the designated HUBZone with the greatest number of employees working at that office (with the exception of services or construction firms);
  • The company must be majority-owned (at least 51%) and controlled by a United States citizen(s), a Community Development Corporation, an Agricultural Cooperative, or a Native American tribe; and
  • At least 35% of the employees must reside in the HUBZone.

Women-Owned Small Business Program

The Women-Owned Small Business Program was implemented in 2011 to increase the participation of women-owned small businesses in Federal contracts. The Women-Owned Small Business Program provides opportunities to small businesses owned by women and small businesses owned by economically disadvantaged women.

To qualify for the program as a women-owned small business:

  • The business must be in an industry substantially underrepresented by women based upon the North American Industry Code System;
  • The business must be majority-owned (at least 51%) and controlled by a woman (women) who is an American citizen(s);
  • A woman must manage the business; and
  • The business must be considered small by SBA Standards according the North American Industry Code System.

To qualify for the program as an economically disadvantaged women-owned small business:

  • The business must be in an industry underrepresented by women based upon the North American Industry Code System;
  • The business must be majority-owned (at least 51%) and controlled by a woman (women) who is an American citizen(s);
  • The owner(s)/operators(s) must demonstrate an economic disadvantage;
  • A woman must manage the business;
  • The business must be considered small by SBA Standards according the North American Industry Code System.

Service-Disabled Veteran Owned Program

The Service-Disabled Veteran Owned Program was created to allow Government agencies the ability to create set-asides and sole source opportunities to businesses owned by service-disabled veterans.

To qualify for this program:

  • The business must be majority owned (at least 51%) by a “service disabled veteran” (defined as having a service-connected disability determined by the Department of Veterans Affairs or the Department of Defense);
  • The service disabled veteran must own the business unconditionally;
  • The service disabled veteran must control the management and daily operations of the business;
  • The service disabled veteran must hold the highest officer position; and
  • The business must be considered small by SBA Standards according the North American Industry Code System.

If you have evidence of that a business fraudulently obtained a Government contract through a Small Business Administration set-aside program, then give us a call today for a free consultation and case review with an experienced whistleblower attorney.

 

 

Sources:

https://www.justice.gov/opa/pr/hayner-hoyt-corporation-pay-5-million-resolve-false-claims-act-liability

https://www.justice.gov/usao-sdny/pr/manhattan-us-attorney-files-and-settles-civil-fraud-lawsuit-against-ufc-aerospace-and

https://www.justice.gov/opa/pr/information-technology-companies-pay-58-million-misrepresentations-relating-small-business

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