WASHINGTON, D.C. – March 19, 2015 – (RealEstateRama) — Gilbane Building Company will pay the United States $1.1 million to resolve allegations that W.G. Mills Incorporated – a company with which Gilbane merged in November 2010 – violated the False Claims Act by creating a front company, Veterans Constructors Incorporated (VCI), in order to be awarded a Coast Guard contract that was designated for Service Disabled Veteran Owned Small Businesses (SDVOSBs), the Justice Department announced today. The Justice Department also announced that VCI has agreed to pay the United States $50,000 plus five annual contingency payments equal to one percent of VCI’s total annual revenues to resolve these same allegations.
“Those who seek to do business with the government must do so fairly and honestly,” said Acting Assistant Attorney General Benjamin C. Mizer of the Justice Department’s Civil Division. “We will not tolerate contractors who seek to profit at the expense of our veterans and taxpayers.”
“Those who apply for federal contracts must be honest and forthright in their dealings, especially when seeking contracts set aside for service-disabled veterans,” said U.S. Attorney A. Lee Bentley III of the Middle District of Florida. “Working jointly with DOJ and our agency partners has allowed us to make substantial recoveries in these types of cases in recent months. Our office remains committed to pursuing these matters vigorously.”
To qualify as a SDVOSB, a company must be operated and managed by service-disabled veterans and must not be affiliated with a large company. The government alleged that W.G. Mills created VCI merely as a contracting vehicle and that VCI’s affiliation with W.G. Mills rendered it ineligible to be awarded set-aside contracts for SDVOSBs. The government further alleged that W.G. Mills performed the work that VCI was required to perform under the Coast Guard contract, and alleged that if the Coast Guard and the Small Business Administration (SBA) had known that VCI was nothing but a front company, the Coast Guard would not have awarded it the contract.
“Providing the government false information to gain access to set-aside contracts is unacceptable,” said Inspector General Peggy E. Gustafson of the SBA. “The OIG will aggressively investigate such misrepresentations to ensure only eligible businesses are awarded these contracts. I want to thank the U.S. Department of Justice for its dedication to pursuing justice in this case.”
“SBA’s contracting programs, including the Service-Disabled Veteran-Owned Small Business Program, provide eligible small businesses with the opportunity to grow and create jobs,” said General Counsel Melvin F. Williams Jr of the SBA. “SBA has no tolerance for fraud or abuse in any government contracting program and is committed to working with our federal partners to ensure the benefits of these programs flow only to the intended recipients.”
The settlement resolves allegations originally filed in a lawsuit by Michael Jeske and Samuel McIntosh. The investigation was a coordinated effort among the Civil Division, the U.S. Attorney’s Office for the Middle District of Florida, and the SBA’s Office of Inspector General (OIG). The lawsuit was filed in the Middle District of Florida and is captioned United States ex rel. Michael Jeske and Samuel McIntosh v. Gilbane Building Company, W.G. Mills, Inc., and Veterans Constructors Inc., Case No. 8:11-cv-1205 (M.D. Fla.).
The claims resolved by the settlement are allegations only; there has been no determination of liability.