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Eleventh Circuit Backs Whistleblowers in Important Case Involving the 8(a) Small Business Contracting Program

Date Published
Jul 25, 2024
Publication
Law360

25 July 2024. In a significant victory for whistleblowers, the United States Court of Appeals for the Eleventh Circuit has reversed a lower court’s dismissal of a False Claims Act (FCA) case involving the Small Business Administration’s (SBA) 8(a) Program.

The case, brought by relators Dennie Gose and Brent Berry, alleges that Great American Insurance Company (GAIC) and Native American Services Corporation (NASCO) improperly took control of DWG & Associates, Inc., a graduated 8(a) Program participant, without notifying the SBA or seeking required waivers.

The Eleventh Circuit’s decision clarifies the law in several crucial areas. As to the 8(a) Program, the opinion holds that businesses that have graduated from the 8(a) program but continue to bid on and perform 8(a) contracts remain “participants” subject to the Program’s ownership and control requirements. Thus, submitting bids and claims for payment without notifying the SBA of changes in ownership or control can, in some cases, present an actionable claim under the False Claims Act. As to the FCA, the decision reaffirms that when a defendant falsely induces the Government to award a contract or task order, all subsequent claims for payment under that award are false, and therefore actionable under the FCA—even if the claims themselves do not contain express false statements.

This ruling has significant implications for companies participating in or graduated from the 8(a) Program, as well as for the government’s and relators’ ability to enforce compliance with small business contracting regulations.

The relators are represented by attorneys Glenn Chappell and Jon Tycko of Tycko & Zavareei LLP. Mr. Chappell, TZ’s Appellate Practice Group Chair, stated, “We’re delighted with the Eleventh Circuit’s decision and grateful for the chance to move the case forward on behalf of our clients and the public interest.”

The case has been remanded to the District Court. It can now move forward after being halted while awaiting the Eleventh Circuit’s ruling.

This decision reinforces the importance of strict adherence to SBA regulations and the potential consequences of non-compliance, even after graduation from the 8(a) program.

The Case is Gose v. Native American Services Corporation, Great American Insurance Group, Inc., d.b.a. Great American Insurance Company, No. 23-10600 in the United States Court of Appeals for the Eleventh Circuit.

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