IT firms part of $16M false claims settlement
A Virginia IT products and services company agreed to settle with the government over allegations of false claims and fraud in federal small business contracts.
Virginia-based contractor ADS Inc. said it would pay the federal government $16 million to settle bid-rigging conspiracy and false claims allegations brought in a whistleblower lawsuit.
The Justice Department said in an Aug. 10 statement that the $16 million was "one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility."
The settlement resolves allegations with no determination of liability.
According to the statement, the payment covers ADS and five affiliated companies that allegedly received contracts by concealing their relationship with ADS to qualify for contract set-asides by the government for small or disadvantaged businesses.
The ADS affiliates named in the case include Mythics Inc., London Bridge Trading Co. Ltd., as well as MJL Enterprises LLC, SEK Solutions LLC and Karda Systems LLC.
A spokesperson for the General Services Administration Office of Inspector General confirmed that Mythics Inc. is a reseller of Oracle cloud services and products to federal and local governments, as well as commercial businesses, utilities and education markets.
In a press statement ADS said, "The settlement marks the end of the DOJ’s investigation into the company's past eligibility to bid on federal set-aside contracts, and other allegations regarding bidding on contracts. ADS believes it has always complied with standards promulgated by the Small Business Administration."
The statement added that ADS' decision to settle the case came "after incurring millions of dollars in legal fees and countless hours of time value over three years responding to interrogatories and burdensome document requests by the government, hindering the company’s ability to continue serving its customers and employing its people."
Ameliorate Partners, which filed the whistleblower lawsuit against ADS, will receive $2.9 million as part of the settlement.
The matter was investigated by the Justice Department in conjunction with the GSA's IG office and the Small Business Administration.