March 7, 2024 – TZ Appellate Chair Glenn E. Chappell urged the Eleventh Circuit to reinstate a False Claims Act lawsuit that accuses Native American Services Corporation (NASCO) and Great American Insurance Company (GAIC) of fraudulently acquiring government contracts intended for businesses owned by socially and economically disadvantaged persons. The qui tam lawsuit alleges the defendants, which were not small businesses and were not owned or controlled by socially and economically disadvantaged individuals, unlawfully solicited bids for government construction projects in the name of a small Florida construction firm, DWG & Associates Inc., after taking control of DWG from the service-disabled veteran who made it eligible to do work under the contracts. The contracts were supposed to be set aside for eligible businesses under the Small Business Administration’s (SBA) 8(a) Business Development program. The district court dismissed the suit in 2022.
Arguing on behalf of the Relators who filed the lawsuit, Mr. Chappell adjured the Eleventh Circuit panel, “In this case, the only way to interpret the regulatory scheme that applies to the 8(a) business development program in a harmonious way is to interpret the term participant to mean both graduated and non-graduated entities who are still performing under the 8(a) contract they’ve been awarded.”
The Eleventh Circuit judges are currently reviewing the complexities of the case, with particular attention on whether Small Business Administration regulations required termination of the contracts when the defendants seized control of DWG The Department of Justice also argued at the hearing in support of the Relators’ interpretation of the regulations.
This appeal presents important questions of first impression concerning interpretation of the governing regulations and other False Claims Act issues. The Eleventh Circuit’s decision could have significant impacts on the 8(a) program and small businesses who compete for government contracts under set-aside programs.
The case is Brent Berry et al. v. Native American Services Corporation et al., Case No.: 23-10600, in the U.S. Court of Appeals for the Eleventh Circuit.