Federal, state and local governments have developed a variety of ways to promote and support small businesses in the United States. The U.S. Small Business Administration (SBA) is an independent agency of the federal government that oversees many of the federal government’s programs to support this vital segment of the U.S. economy. Other less well-known programs (“SBA type programs”) support businesses from certain parts of the country and those owned by minorities, women and veterans, including HUBZone, Service Disabled Veteran Owned Small Business Concern (‘‘SDVO’’) and the Woman Owned Small Business (‘‘WOSB’’) program.
Businesses eligible for these SBA type programs can apply with government agencies that provide loans and grants for small businesses, including small business loans, seed and venture capital, grants and in some instances, tax-exempt bonds. They can also bid on government contracts which often dictate that a certain percentage of a contract must be awarded or performed by a business eligible for one of these SBA type programs.
Whether a business is seeking a government-funded grant or loan or becoming a government contractor under one of these SBA type programs, a prerequisite to participation of any kind is that the business actually be eligible. Any business participating in one of these programs must certify compliance with the SBA program requirements in order to accept any government funding. For example, if a business is seeking the benefit of a loan offered only to women owned businesses, it must certify that it actually is a woman-owned business in order to accept the loan. If a business was not in compliance with the program requirements, or later fell out of compliance but did not disclose the non-compliance to the government, the business may face liability under the False Claims Act (“FCA”). Even if the business adequately completes the contract or fully repays the loan, it may be liable to repay the government for all payments made because it deprived the government of the chance to allocate that money to a business that actually met the program criteria. Significantly, if found liable under the False Claims Act, the business may be responsible to repay three times whatever the original amount was and may be permanently barred from participation in these programs in the future.
If you know of a business that has falsely certified itself as a participant in one of these SBA type programs, and you would like to learn more about or would like to bring a qui tam whistleblower lawsuit against the wrongdoer, the whistleblower attorneys at Keller Grover LLP may be able to help you. The whistleblower lawyers at Keller Grover LLP understand qui tam litigation, including the whistleblower protection provisions, and strive to achieve the best possible results for their clients.