by Ben Vernia | September 21st, 2011
On September 21, the Department of Justice announced that Future Research Corp., based in Huntsville, Alabama, had agreed to pay $200,000 to settle False Claims Act allegations relating to its use of a HUBZone designation under the Small Business Administration. According to DOJ’s press release:
Future Research Corp., located in Huntsville, Ala., and its president, Jesse Nunn, have agreed to pay the United States $200,000 to settle claims that they inappropriately obtained contracts from the Navy, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s (SBA) Historically Underutilized Business Zone (HUBZone) program. Future Research Corp. bid on and received the Navy contracts even though it was not qualified for the HUBZone program at that time.
Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the SBA for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.
The United States alleged that Future Research Corp. did not actually maintain its principal office in a designated HUBZone location in Huntsville at the time it bid on and received certain Navy contracts, but elsewhere in Huntsville in a location that was not designated as a HUBZone. Despite not properly qualifying for the HUBZone program, Future Research Corp. was awarded Navy contracts that had been set aside for qualified HUBZone companies based upon the false certifications the company and Nunn made to the Navy.
The case was apparently an agency referral, and not a qui tam suit.