by Andrew Murray | November 13th, 2019
On October 23, 2019, the Department of Justice announced the settlement. The Press Release states:
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Upstate Construction Services, LLC (Upstate) and Structural Associates, Inc. (Structural) have agreed to pay more than $1 million in total to resolve allegations that they improperly obtained government contracts set-aside for companies qualified as historically underutilized business zone (HUBZone) firms, announced United States Attorney Grant C. Jaquith.
The United States occasionally utilizes government contracting to promote small businesses, including firms that qualify as HUBZone entities. To be eligible for these contracts, a firm must qualify as a small business, have its principal office located in a HUBZone, and have a certain percentage of employees live in a HUBZone.
The settlements resolve allegations that Upstate (which was a qualified HUBZone entity) and Structural (which was not) entered into a set of agreements – including two Silent Joint Venture Agreements – that were not disclosed to the government. The agreements enabled Upstate to obtain bonding on jobs that it otherwise would not have been able to obtain, and in exchange Structural (which could not have bid on the jobs itself or as part of a joint venture with Upstate) received approximately half of Upstate’s profits on government contracts worth millions of dollars.
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