July 30, 10

NEWS / Georgia Defense Contractor and Its President to Pay $750,000 to Resolve False Claims Act Allegations

WASHINGTON – Quantum Dynamics Inc, located in Macon, Ga., and its president, Audrey Price, have agreed to pay the United States $750,000 to settle claims that they fraudulently obtained contracts from the Army, the Justice Department announced today. The contracts had been set aside for companies that qualified for the Small Business Administration’s Historically Underutilized Business Zone (HUBZone) program. Quantum was allowed to participate in the HUBZone program based on false statements made to the government.

Under the HUBZone program, companies that maintain their principal office in a designated HUBZone and employ 35 percent of their workforce from a HUBZone, among other requirements, can apply to the Small Business Administration (SBA) for certification as a HUBZone small business company. HUBZone companies can then use this certification when bidding on government contracts. In certain cases, government agencies will restrict competition for a contract to HUBZone-certified companies.

The United States alleged that Quantum did not actually maintain its principal office in a designated HUBZone location in Washington, D.C., as they had represented to the Army and the SBA, but rather set up their office in a Virginia suburb. Additionally, the government alleged that Quantum Dynamics did not employ a sufficient percentage of employees who lived in a HUBZone. Despite not properly qualifying for the HUBZone program, Quantum Dynamics was awarded Army contracts that had been set aside for qualified HUBZone companies based upon the false statements they made to the Army and the SBA.

"The Department of Justice is committed to rooting out fraud in government contracting programs," said Tony West, Assistant Attorney General for the Civil Division of the Department of Justice. "We will take action against those contractors who seek to gain an unfair advantage over qualified HUBZone small businesses."

"This settlement sends a strong message that the government will not tolerate fraud in the HUBZone or any other SBA program, and that we will pursue civil fraud and all other remedies against those who seek to obtain government contracts through false statements," said SBA Inspector General Peggy E. Gustafson.

"This case represents the cooperative effort of SBA’s Offices of the General Counsel and the Inspector General and the Department of Justice to uncover and remedy fraud in our procurement programs," said SBA General Counsel Sara Lipscomb.

Assistant Attorney General West thanked the Justice Department’s Civil Division, the SBA Office of General Counsel, and the SBA Office of Inspector General for the collaboration that resulted in the settlement announced today.

http://www.justice.gov/opa/pr/2010/July/10-civ-874.html