A small business and its owner have agreed to pay $250,000 to resolve HUBZone fraud allegations, including a claim that the company’s HUBZone office was a “virtual” location where no employees actually worked.
According to a Department of Justice press release, Air Ideal, Inc. and its majority owner have also agreed to pay the government five percent of the company’s gross revenues over the next five years.
HUBZone certifications are averaging 116 days from the date of application to the date of certification, according to a fascinating SBA Office of Inspector General Report on the HUBZone certification process. The 116-day time frame is considerably longer than the SBA’s goal of 90 days. However, in a majority of cases, the SBA does complete the certification process within 90 days of receiving all of the applicant’s supporting documentation.
In addition to an overview of the time frames associated with a HUBZone certification (a question I am often asked), the SBA OIG report concludes that the SBA’s HUBZone application procedures need updating–and that three potentially ineligible firms were certified in 2012.
The Department of Justice has filed a complaint accusing an Ohio construction contractor and its owner of fraudulently obtaining HUBZone certification and HUBZone set-aside contracts.
According to a DOJ press release, the government is alleging that William Richardson, the owner of TAB Construction Co. Inc., made false statements regarding TAB’s principal office to obtain HUBZone certification, then used that certification to win millions of dollars in HUBZone set-aside contracts.
A Treasury Department solicitation did not require contractors to be certified HUBZone participants at the time the solicitation was issued, despite language in the solicitation arguably requiring just that in order to receive a high rating for socioeconomic status.
In a recent GAO bid protest decision, the GAO held that the agency properly interpreted the solicitation to require HUBZone certification at the time proposals were due, not the time the solicitation was issued. The GAO’s ruling comports with the HUBZone program regulations, which do not require contractors to be certified at the time a solicitation is issued in order to be considered HUBZone participants for purposes of that solicitation.