A precedent-setting False Claims Act (FCA) lawsuit initially filed in 2014 by whistleblower Andrew Scollick, will proceed in Federal court. Mediation was unsuccessful. A trial date is pending the requested ruling by the parties on the various motions before the court.
The qui tam lawsuit filed in the U.S. District Court of Washington D.C. against 18 defendants for violations of the FCA in connection with applying for government construction contracts by obtaining Service Disabled Veteran Owned Small Business (SDVOSB) status, HUBZone status, or Section 8(a) status, when the bidders did not qualify for the statuses claimed.
Case background: What you need to know
Scollick v. Narula alleges that a multi-million dollar scheme existed to systematically deny SDVOSB owners contracts.
This case was unique in that Scollick also named as defendants the insurance broker who helped secure the bonding that was required for the contractor defendants to bid in order to receive the contracts.
The court initially dismissed the surety defendants and Scollick amended his complaint alleging that the insurance companies “knew or should have known” that the bonded contractors did not qualify as SDVOSB businesses. The bonding companies should have known that the construction companies were shell companies fronting for larger non-veteran owned entities that violated the government’s contracting requirements.