Florida shipyard company pays $1 million to settle qui tam SBA allegations

by Ben Vernia | October 30th, 2014

On October 29, the Department of Justice announced that a Jacksonville, Florida, shipyard company had agreed to pay $1 million to resolve claims, originally brought by two whistleblowers, that the company falsely represented its status as a Service Disabled Veteran Owned Small Business. According to DOJ’s press release:

North Florida Shipyards and its president, Matt Self, will pay the United States $1 million to resolve allegations that they violated the False Claims Act by creating a front company, Ind-Mar Services Inc., in order to be awarded Coast Guard contracts that were designated for Service Disabled Veteran Owned Small Businesses (SDVOSBs), the Justice Department announced today. North Florida Shipyards has facilities in Jacksonville, Florida.

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To qualify as a SDVOSB on Coast Guard ship repair contracts, a company must be operated and managed by service disabled veterans and must perform at least 51 percent of the labor. The government alleged that North Florida created Ind-Mar merely as a contracting vehicle and that North Florida performed all the work and received all the profits. The government further alleged that if the Coast Guard and the Small Business Administration (SBA) had known that Ind-Mar was nothing but a front company, the Coast Guard would not have awarded it contracts to repair five ships.

In December 2013, the SBA suspended North Florida, Matt Self, Ind-Mar and three others from all government contracting. In April 2014, North Florida and Matt Self entered into an administrative agreement with the SBA in which they admitted to having created and operated Ind-Mar in violation of its Coast Guard contracts and SBA statutes and regulations.

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The relators will receive $180,000 of the settlement (and 18% relator’s share), DOJ announced.

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