Industries for the Blind and Visually Impaired: AbilityOne Staffing, Subcontracts and Payments

Industries for the Blind and Visually Impaired agreed to pay more than $1.9 million to resolve allegations involving AbilityOne staffing, subcontracts and payments from manufacturers. The government placed the alleged furniture staffing misrepresentations between 2009 and 2018. It also alleged that the company sent clothing work to a subcontractor that did not generally use blind labor and had designers and sales representatives who accepted improper gifts and money. If you know who performed the work or who received a manufacturer’s payment, you may see the part of an AbilityOne contract that the government never saw.

The Justice Department announced the settlement on September 30, 2020. The company, known as IBI and headquartered in West Allis, Wisconsin, was established to increase employment and training opportunities for people who are blind or visually impaired. Its federal set-aside contracts came with a commitment to provide those jobs and meet the contracts’ other requirements. That employment commitment is what gives the furniture and clothing allegations their force.

The AbilityOne Staffing Promise Behind the Furniture Contracts

IBI allegedly told the U.S. AbilityOne Commission that it would maintain a 3:1 blind-to-sighted ratio of employees when requesting set-aside contracts for furniture design and installation.

The representation concerned the workforce behind the service. Someone could know the furniture specifications, see an installation completed and still be missing the staffing information on which the contract request depended. For an employee who worked with those requests or staffing records, the important comparison is the workforce promised to the Commission against the workforce supporting that promise.

That is the issue a false government procurement certification case brings into view. We look at what the company represented, who supplied or approved that information, and how it connected to government business. In IBI’s case, the government alleged a specific staffing promise made while seeking specific kinds of work.

The purchasing structure explains why. In the background to its 2022 qualification rule, the Commission described a Procurement List of products and services that federal agencies must buy from participating nonprofit agencies. The Commission decides what goes on that list and sets the fair market price. National Industries for the Blind and SourceAmerica serve as central nonprofit agencies distributing orders to participating organizations.

The Commission also described reviewing an organization’s capacity to employ qualifying workers, perform the required labor, meet government quality standards and deliver on schedule before adding a product or service. Employment and performance belong in the same purchasing decision. The program uses federal buying power to create jobs, and the workforce representation helps explain why that supplier gets the work.

Jobs for blind workers were the point of the purchase. The workers the program exists to serve and the contractors honoring that promise both have something at stake.

The Screen-Printed Clothing Subcontract

The clothing allegation concerned where IBI sent the work. The settlement resolved claims that IBI improperly subcontracted a set-aside contract for screen-printed clothing to an entity that did not generally use blind labor.

We see the absurdity in that allegation: work reserved to employ blind workers allegedly went to a shop that did not generally use blind labor.

Production and labor records show who actually did the work. Those records matter together because the name on the federal contract and the workforce making the goods can sit in different businesses. We examine the subcontract against the employment commitment attached to the government work.

For a program built around employment, who makes the clothing is part of what the government is buying. That is why the subcontract belongs in the same account as the finished goods.

Manufacturer Gifts and Money Were Separately Disclosed

The government also alleged that furniture designers and sales representatives working for IBI took impermissible payments and gifts from manufacturers on certain contracts.

This is the business relationship behind the government contractor kickback issue. The Anti-Kickback Act addresses benefits used to obtain or reward improper favorable treatment connected to federal contract work. In a furniture business, a manufacturer payment to a designer or sales representative raises a question about the relationship between the benefit and the contract decision. We examine who paid, who received the benefit and what work or treatment it concerned.

IBI’s own investigation brought this part of the settlement to the government. The Justice Department said the company investigated and disclosed the alleged receipt of gifts and money by its furniture designers and sales representatives. Those allegations were not in the whistleblower complaint. IBI received settlement credit for its disclosure, cooperation and remediation efforts concerning that conduct.

The distinction is useful to an insider. The staffing representation, the clothing subcontract and the manufacturer payment involve different transactions and different sources of knowledge. Someone who knows the production workforce may never see a manufacturer’s gift. Someone who sees that gift may know nothing about the staffing information sent to the Commission. Each account needs its own connection to the government contract.

The False Claims Act Settlement

The IBI settlement resolved a case brought under the False Claims Act’s whistleblower provision. The Justice Department said the whistleblower would receive a share of the settlement.

How Much Money Can a Whistleblower Get?

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We work with you on the contract representations, the information you know and the government payments they affected.

ReadyOne and the Labor-Certification Pattern

ReadyOne Industries, previously the National Center for Employment of the Disabled, faced a separate AbilityOne case over annual labor certifications. The government alleged that the company falsely certified the proportion of direct labor performed by blind or significantly disabled workers from 2000 through 2006. Its products included archival boxes and apparel.

A former employee brought that case, and the Justice Department announced a $5 million settlement in October 2012. The parallel is the labor representation behind the government purchase: IBI’s alleged promise about its furniture workforce and ReadyOne’s alleged annual certifications about direct labor each put employment information at the center of a government procurement case.

What Proof Do You Need as a Whistleblower?

Which records establish an AbilityOne case is something we work through with you. The contract and billing records answer different questions from staffing and production records. Your knowledge of the workforce or a manufacturer’s payment can explain a contradiction that the bill alone would never reveal.

You Know the Workforce Behind the Contract

If you know how an AbilityOne staffing promise, subcontract or manufacturer payment differed from what the government was told, speak to our whistleblower experts. We build your case around that knowledge, bring in government procurement fraud whistleblower lawyers who understand employment certifications and contractor kickbacks, and stay beside you through the case.