Veteran Construction Associates: Finished Construction, False Veteran Ownership

Veteran Construction Associates admitted FCA liability for VA ownership certifications and agreed to pay $1.3 million to resolve false veteran-ownership allegations over VA construction contracts. The company completed the construction. The government’s case concerned who owned and controlled the business that won it. If you know who actually runs a veteran set-aside contractor, your knowledge can help expose the gap between the ownership claim and the business behind it.

The Ownership Claim That Opened the Bidding

Veteran Construction Associates LLC was a construction company headquartered in Burlington, New Jersey. Formed in 2006, it listed a service-disabled veteran as its 51% owner. From 2008 through 2011, the company bid on and received government construction contracts reserved for businesses certified as owned and operated by service-disabled veterans.

The Department of Veterans Affairs was buying construction through a program designed to give qualifying veteran-owned small businesses an opportunity to compete. As the Justice Department explained, the government set those acquisitions aside for exclusive competition among service-disabled veteran-owned small businesses. Ownership and control determined who could enter that competition.

That is why the ownership representation mattered before anyone sent an invoice. It gave the company access to work reserved for a particular group of contractors. The government’s allegation was that Veteran Construction lacked the ownership and control that made it eligible for those awards.

For an honest veteran-owned construction business, the opportunity to bid on reserved work is the point of the program. An ineligible company taking that work diverts the opportunity even when the finished construction satisfies the buyer.

What Is a False Certification?

Veteran Construction’s alleged false certification concerned its veteran ownership and control. The government alleged that Veteran Construction was not owned and controlled by a service-disabled veteran and therefore should neither have received the contracts nor invoiced for work under them.

Veteran Construction successfully completed the construction and submitted 68 invoices totaling $6.5 million, against the $1.3 million it agreed to pay in settlement.

The completed work makes this case useful to someone inside the business. A project manager may know that the construction was delivered. An employee handling bids or company finances may know who made the decisions behind the ownership claim. Those people see different parts of the same transaction.

We see the unfairness in treating the finished job as the whole story. The government reserved an opportunity for veteran-owned businesses.

Completed Work and False Eligibility Can Exist Together

Veterans of the Land supplies a VA parallel. In its May 2015 settlement announcement, the Justice Department described allegations that a non-veteran co-owner controlled decisions at a company receiving VA cemetery landscaping and restoration awards. The department expressly said it did not allege improper performance of those services. Veterans of the Land agreed to dissolve.

That is the connection an employee who knows the decision-makers may recognize.

What Veteran Construction Admitted

The Justice Department’s January 20, 2015 announcement stated the company’s admission directly:

The U.S. Attorney’s Office for the District of New Jersey announced the civil settlement. It credited the Department of Veterans Affairs Office of Inspector General’s Criminal Investigation Division and the Small Business Administration Office of Inspector General’s Eastern Region with the investigation leading to it.

The Settlement Restricted Future Contracts

The civil resolution reached beyond money. Veteran Construction agreed to restrictions on its own future contracting and on the ownership interests its current and former members could hold in other businesses:

• The company would never seek government contracts set aside for veterans.
• It would seek no government contracts at all for three years from the settlement.
• The company agreed that none of its current or former members would maintain more than a 10% ownership interest in another company seeking veteran set-aside contracts for three years.

The last term reached beyond the Veteran Construction name. It addressed the members’ interests in another business seeking the same reserved work.

What Proof Do You Need as a Whistleblower?

For an ownership-certification case, the useful proof connects what the contractor told the government with who owned, controlled and operated the business, and with the contracts and payments that followed. Our whistleblower experts work through those connections with you.

Ownership papers identify the listed interests. Bid files and project communications can show who sets the price, writes the proposal and directs the work. In construction, who controls bonding can also help explain which business stands behind the award. Payroll and payment records can connect the people performing the contract to the business employing them and receiving the proceeds. Together, those records give substance to a set-aside fraud concern.

In the wider contracting pattern, an eligible company can supply the name on the award while another business controls bidding and performance. Comparing the named owner with the people making decisions is how we examine that concern. We connect the particular certification to the operating arrangements behind it, then to the invoices under the resulting award.

An estimator may understand who supplied the bid price. Someone working in accounts may know who controlled the bank flow and where the proceeds went. A subcontractor may know whose instructions governed the job. You may see the ownership problem from a place the agency buying the construction cannot.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The whistleblower’s share follows the recovery in the case brought, rather than the value of the contractor’s invoices.

You Know Who Ran the Contractor

If the veteran ownership claim differed from the business you saw operating, tell our whistleblower experts who made the decisions. We build the case with you around the certifications, the control and the government payments, and bring in government procurement whistleblower lawyers who understand veteran set-asides. You have a partner from the first account of the ownership problem through the pursuit of a recovery.