Allegations concerning fraudulently obtained contracts against the defense contractor ADS Inc. have been settled, according to a recent Department of Justice press release.

The defense contractor and their subsidiaries have agreed to pay the United States government $16 million to settle the False Claims Act allegations. These allegations accuse the Virginia-based contractor of taking part in illegal bid rigging schemes inflating and/or distorting prices, concealing the affiliation with other businesses and intentionally misrepresenting business sizes and eligibility as 8(a) qualified or service disabled in order to receive government contracts set aside for small business promotion.

According to Justice, the settlement ”ranks as one of the largest recoveries involving alleged fraud in connection with small business contracting eligibility.” 

Acting Inspector General Hannibal “Mike” Ware said in a release that these actions “deprived legitimate small businesses of valuable federal contracting opportunities,” and the Office of Inspector General “will aggressively pursue companies that, through false statements, wrongfully benefit from small business set-aside contracts.”

The settlement resolves a lawsuit that was filed under the provision of the False Claims Act that permits private parties to file suit on behalf of the United States for false claims and receive a portion of the recovery. The whistleblower will receive about $2.9 million.

U.S. Attorney Channing Phillips for District of Columbia explained that the settlement reflects government commitment to “ensur[ing] that its business partners are truthful in their dealings” with the government. Any contractors who try to misrepresent or disguise themselves to receive funding set aside for small business promotion “will be held accountable for their fraud on the public.”

The settlement resulted from coordinated and collaborative effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorneys’ Offices for the District of Columbia and the Eastern District of Virginia, the Small Business Administration’s Office of Inspector General, and the General Services Administration’s Office of Inspector General.

The claims resolved by the settlement have not been determined liable and remain only allegations.