False Claims Counsel

On November 10, the Department of Justice announced that a northern Virginia contractor and its president will pay $150,000 to settle allegations that it defrauded the Small Business Administration by obtaining a Historically Underutilized Business Zone (“HUBZone”) contract. According to DOJ’s press release:

CFP Group, located in McLean, Va., and its president, Roberto Clark, have agreed to pay the United States $150,000 to settle claims that they used false statements to obtain a contract from the Department of Veterans Affairs, the Justice Department announced today. The United States alleged that CFP Group and Clark made false statements to the Small Business Administration (SBA) to obtain certification as a Historically Underutilized Business Zone (HUBZone) company, and then used this certification to wrongfully obtain a Veterans Affairs contract for fire alarm installation.

Under the HUBZone program, companies that maintain their principal office in a designated HUBZone, and meet certain 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 Roberto Clark submitted an application on behalf of CFP Group to the SBA to have it certified as a HUBZone company. On the application, Clark represented that CFP Group’s principal office was located in a designated HUBZone in Maryland. In fact, the United States alleged, no company employees worked at that location and Clark’s office was actually in Vienna, Va., which is not a designated HUBZone location. Based on the false application, the SBA certified CFP Group as a HUBZone small business company. CFP Group then used this certification to obtain a fire alarms systems contract from the Department of Veterans Affairs, which had been set aside for a qualified HUBZone company. The company is no longer participating in the HUBZone program and has relocated to McLean, Va.