April 2, 2015 — Highly prized government contracts can be extremely profitable for many government contractors. But contractors must deal fairly and honestly with the government. It is a violation of the False Claims Act for government contractors to mislead the government by setting up front companies to skirt the rules regarding the procurement of contracts to Service Disabled Veteran Owned Small Businesses (SDVOSBs). When contractors cheat the American taxpayers by misrepresenting their SDVOSB status, the qui tam provisions of the False Claims Act authorize insider employees and others to bring a whistleblower lawsuit on the government’s behalf. At the time the case is tried or settled, the tipster is entitled to a share of any monies received.
Government Contractor W.G. Mills Allegedly Violated False Claims Act by Creating Front Company to Bid on SDVOSB Contract
Gilbane Building Company has settled a whistleblower lawsuit for $1.1 million. Samuel McIntosh and Michael Jeske filed their False Claims Act lawsuit in federal court in Florida. The informants alleged that W.G. Mills Incorporated, which merged with Gilbane in November 2010, wrongfully pursued the award of a Coast Guard contract that was reserved for SDVOSBs. To be eligible for SDVOSB contracts, a contractor must be a small company run by service-disabled veterans and have no affiliation with a large company.
W.G. Mills allegedly set up a front company, Veterans Constructors Incorporated (VCI), solely for the purpose of bidding on the Coast Guard contract. But VCI’s ties to W.G. Mills allegedly made the company ineligible to bid on contracts reserved for SDVOSBs. Once VCI was awarded the contract, W.G. Mills reportedly did the work. Had the Coast Guard been aware that VCI was just W.G. Mills’ front company, the Coast Guard contract would have been awarded to a qualifying SDVOSB.
In addition to the $1.1 million that Gilbane will pay, VCI will also pay $50,000 along with five yearly contingency payments equivalent to one percent of VCI’s total annual revenues.
Whistleblowers Notify Government About False Claims Act Violations by Government Contractors
While Waters & Kraus is not handling this particular case involving government contractor fraud, we are representing whistleblowers in similar lawsuits. If you have comparable claims against a different government contractor, contact us or call our qui tam attorneys at 800.226.9880 to learn more about our practice and how we can work together to notify the government about fraud and abuse. Our qui tam lawyers, like Michael Armitage and Gary Paul in the firm’s office in California, are committed to advancing and protecting informants’ interests in whistleblower lawsuits.