FCA Impact Of DOJ’s Increased Focus on Small Business

In 2014, the Small Business Administration reported that almost a quarter of approximately $367 billion of eligible funding for small business contracting, or roughly $91.7 billion, was awarded to small businesses as prime contractor, exceeding the federal government’s goal. These latest numbers reflect a growing trend and mirror similarly strong numbers for fiscal year 2013. The general increase in small business contracting has tracked across all of the SBA’s business assistance programs, including programs designed to assist disabled veterans, economically disadvantaged business owners, and women to compete in the federal marketplace. By most accounts, fiscal year 2015 saw similarly robust contracting activity with small businesses.

Not surprisingly, as federal contracting dollars awarded to small businesses increase, so has the government’s focus on identifying and prosecuting small business certification fraud. As demonstrated by a number of recent cases and studies, the U.S. Department of Justice has ramped up efforts to identify and punish false certifications made in connection with SBA programs and is using the wide net of the False Claims Act to do so. In light of these trends, now, more than ever, small businesses seeking out these federal dollars and contracting opportunities, and large businesses working with them, are best served by understanding the lasting impacts of running afoul of the FCA.

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