Harper Construction: The Prime’s Small-Business Certifications

In the Harper Construction settlement, the company paid $5.4 million to resolve allegations that it falsely certified small disadvantaged business participation on military construction projects. A former employee of its masonry subcontractor brought the case. The allegations connected the business doing the work to the prime contractor telling the government that its subcontracting requirements had been met.

The Justice Department announced the payment on June 1, 2016. It described Harper as a large, privately held general contractor headquartered in San Diego, earning a substantial portion of its revenue from government construction across the country. The government’s allegation went directly to how Harper obtained that money: it allegedly billed for military-base work while knowingly using sham small disadvantaged businesses and certifying that they were legitimate.

Four Contracts and a Small-Business Promise

The settlement covered four government contracts to construct facilities at Camp Pendleton and Camp Lejeune. Those contracts required Harper to subcontract a percentage of the work to small disadvantaged businesses. The requirement was intended to give small businesses a fair share of federal contract and subcontract dollars.

As the prime contractor, Harper held the government contracts and made the disputed certification. The government alleged that Harper claimed to have satisfied the small-business requirement by subcontracting with sham firms. It also alleged that Harper required those firms to pass all their work to an affiliated large business, Frazier Masonry Corporation. The alleged direction came from the prime itself.

The Opportunity Was Supposed to Reach a Small Business

The alleged pass-through turned a small-business opportunity into work for a large business. We see a particularly hollow promise here: Harper allegedly certified small-business participation while requiring those firms to hand over all the work.

The United States Attorney’s statement in the Harper announcement put the lost opportunity alongside the taxpayer money. It identified who else was cheated by the alleged arrangement:

That is why the relationship between the small-business name and the larger operation matters to the government payment. Someone inside the subcontractor could recognize the gap between the participation Harper allegedly certified and where it directed the work.

A separate construction case shows how the workforce can expose that split. In its settlement with Okland Construction, the government alleged that the company performed primary functions on eight small-business program contracts and disguised its own staff as Saiz Construction employees. For someone assigning workers or processing payroll, the employer behind the crew can contradict the business identity presented to the government.

What Proof Do You Need as a Whistleblower?

For a case about a prime’s small-business certification, useful evidence connects what the government was told to who performed the work and the money paid for it. In Harper’s case, the alleged contradiction ran from the contract’s subcontracting requirement through Harper’s certification to work passed to Frazier Masonry. Each part belongs to the same construction project and the same promised participation.

We examine the contract and subcontract together: what role was reserved for a small business, what the prime said that business would do, and what the performing company actually supplied. Project assignments and payroll can identify the people behind the work. Invoices and payments can show which business charged for it and which received the money. These comparisons bring a certification back to the job an insider knows.

The direction of the work matters, too. Harper allegedly required the pass-through, so communications about who assigned the work and who approved the arrangement would bear directly on that allegation. Someone who saw those decisions may have a different part of the story from someone who saw the billing. We develop the case around those connections with you.

In its 2022 report on private military and security companies, Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, Transparency International Defence and Security called for primes to report subcontractor identities, ownership and itemized subcontract values when submitting invoices, including beyond the first and second tiers. Its proposal connects the business behind the work to the request for government money. That is also the connection Harper’s alleged certification and pass-through put at issue.

The Earlier Masonry Settlement and Harper’s Payment

The masonry companies’ resolution came first. In April 2014, the Justice Department announced that the masonry defendants, including Frazier Masonry, had paid nearly $1.9 million to resolve allegations that size-status misrepresentations caused prime contractors to certify compliance on construction at Camp Lejeune and Camp Pendleton. Harper’s later payment for its own alleged role brought the Justice Department’s reported recovery in the matter to more than $7 million, including the earlier co-defendant settlements.

The Defense Criminal Investigative Service investigated the subcontractors before the Harper resolution. The investigation reached the businesses behind the subcontract while the civil case reached the prime’s representations to the government.

A Subcontractor Employee Brought the Case

A former Frazier Masonry employee filed the False Claims Act case resolved by Harper’s settlement. The announcement said he would receive $1.49 million from that resolution. His position at the subcontractor is the useful point for someone reading this from inside another construction business: the person who brought the case worked below the prime in the contracting chain.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Here, the insider’s connection was to the business that allegedly received the work behind the small-business names. If your work exposes a similar gap between participation reported to the government and performance on the job, our whistleblower experts can assess that connection with you.

You Saw Who Did the Work

If you know a prime certified small-business participation while directing the work elsewhere, talk with our whistleblower experts about the project you know. We connect your view of the subcontract to the prime’s representations and bring in defense contractor fraud whistleblower lawyers who understand small-business certifications and construction performance. We stay with you as your partners through the case, starting with the difference you saw on the job.