On January 22, a New Jersey construction firm, Veteran Construction, reached a $1.3 million settlement with the U.S. Department of Veterans’ Affairs (VA) in order to settle claims that it misrepresented itself as a service-disabled veteran-owned small business (SDVOSB) by using a veteran “nominee” for SDVOSB status. From 2008 through 2011, Veteran Construction used this status to receive over $6.5 million in set-aside contracts from the VA.
In the settlement agreement reached between Veteran Construction and the DOJ, in addition to the $1.3 million payment, Veteran Construction has agreed to never again seek any veteran set-aside government contracts. It will not seek any U.S. government contracts for three years. It also agreed that for three years, none of its current or former members will maintain more than a 10 percent interest in any company seeking SDVOSB set-aside contracts.
The company admitted that it was liable to the U.S. under the False Claims Act (a law criminalizing the act of submitting false claims/requests for payment to the government). It is unclear, however, how the DOJ and Veteran Construction reached $1.3 million as the settlement amount given that it received $6.5 million in set-aside work. Under the False Claims Act, a company found liable under its provisions is responsible for “treble” damages; i.e., it must pay the government’s claim, times three. Other penalties are also involved. (Access the DOJ’s primer on the False Claims Act here).
This isn’t the only SDVOSB set-aside fraud to come out of the Garden State recently. In October, a Teaneck, New Jersey woman was sentenced to eight months home confinement (and to pay $100,000 in restitution) for pretending her business was owned by a disabled veteran so she could score $1.2 million in VA set-aside contracts from 2010 through 2011. She had asserted SDVOSB status for her company, Office Dimensions, claiming her father-in-law, a veteran, owned and controlled the company. The problem? Not only did he have no involvement with the company, but he was not service-disabled. Eventually the misrepresentation caught up with her.
This illustrates why it is important that we now have an official certification (verification) program to verify eligibility for the VA’s Veterans First Contracting Program. Based on when these actions took place (i.e., before verification existed), these companies must have checked the appropriate boxes to self-certify and then bid on the set-aside contracts. They were under the radar enough that no one questioned or protested their status. This may not have happened if they had gone through the wringer at the VA’s Center for Verification and Evaluation first.
So yes, the verification process is a pain, but as a veteran, wouldn’t you rather have to go through it rather than know that companies like this are getting the set-aside work designed for veterans like yourself?
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Prior to VA verification, we were able to obtain VA contracts as a SDVOSB. Under the new perplexing, confusing and bureaucratic verification process, we have none. Bring back self-certification. I would rather compete against the fraud than the VA verification process. We are currently sitting on our hands because we have to wait 6 months to begin the verification process again because we omitted one document that could have been sent within 24 hours if they had just asked us for it.
I’ve heard those horror stories too. Were you denied verification? That’s the only event that prompts the six-month wait. They’ve implemented processes where you withdraw instead of having to get the denial letter, so a flat-out denial is now very rare.
I also have a guidebook on the verification process, which covers most issues in plain English. It can be accessed at: https://legalmeetspractical.com/va-vetbiz-verification-program/vetbiz-guidebook/.
CVE is nonsense. When they first added CVE verification for SDVOSB status, all I had to submit to certify was a DD-214 and my VA disability rating letter (plus CCR, DUNS, etc that everyone else has to submit). THAT should be enough! The onerous process in place now is unfair to struggling veteran companies.
The VA is bad and getting worse by the day. Bureaucracies are run by bureaucrats – which by definition justify their existence by adding bureaucratic nonsense to everything they do. The CVE process is just another example. Back in the Navy, my position was always “find a way to say YES” if the request was reasonable. The VA’s position is “find a way to say NO.”
They need to figure out how to help veterans instead of ways to block our efforts at contributing to our society.
What ever happened to contracting officers asking for any data, readily available like a DD-241 or registration @ DOL and on SAM? Why do we have to go through certification when government employees can just do their jobs and conduct preliminary screening. Have been doing federal work during the SDVOB period of time and was never asked until a year ago by a Navy procurement officer. Turned out DOL vet data base was in error, but at least he asked and we’ve gotten the data vase corrected.
It’s really frustrating how many problems could be avoided by just a little bit of fact-checking. Remember this? http://smallgovcon.com/service-disabled-veteran-owned-small-businesses/contractor-misrepresented-vosb-status-for-152-million-lease-says-va-oig/. The VA awarded a $152 million lease to a non-eligible company. From the reading of the OIG report on this, the mistake could have been avoided with about an hour of effort. By not spending that hour up front, look at what happened.