by Ben Vernia | March 13th, 2018
On March 12, the United States Attorney for the Southern District of California announced that San Diego-based TrellisWare Technologies, Inc., had agreed to pay over $12 million to settle civil allegations that the company had falsely certified that it was a small business in order to obtain federal research and development contracts. According to the US Attorney’s press release:
TrellisWare Technologies, Inc., a communications company located in San Diego, has agreed to pay $12,177,631.90 to settle civil False Claims Act allegations that it was ineligible for multiple Small Business Innovation and Research (SBIR) contracts it had entered into with government defense agencies. TrellisWare is a majority-owned subsidiary of ViaSat, Inc., a global broadband services and technology company also headquartered in San Diego.
The SBIR program is designed to stimulate technological innovation by funding small businesses to engage in federal research and development efforts. To be considered a small business for purposes of SBIR awards, a contractor must not be majority owned by another company. Between 2008 and 2015, TrellisWare was awarded multiple SBIR contracts to provide the Navy, Army and Air Force with a variety of technology services and products involving communications and signal processing systems, including wireless networks used in military tactical environments. TrellisWare self-certified that it met the small business size requirements for eligibility to receive SBIR funding. But based on certain disclosures that TrellisWare later made about its ownership relationship with ViaSat, the government conducted an investigation into TrellisWare’s eligibility for SBIR awards. The government contends that TrellisWare was not eligible for SBIR awards because it was actually a majority-owned subsidiary of ViaSat at the time it was awarded and performed on SBIR contracts.
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