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Court enforces “presumed loss” rule in 8(a) fraud case

August 3, 2016 By Andrew Smith

Presumed LossIn a Memorandum Opinion issued on June 17, 2016, the U.S. District Court for the District of Columbia applied the so-called “presumed loss” rule to assess the full contract value as the measure of the government’s loss for purposes of sentencing an individual convicted of misusing the SBA’s 8(a) program to win set-aside contracts.  (See United States v. Singh, Criminal Action No. 15-173 (RBW) (D.D.C. Jun 17, 2016).

This appears to be the first published court decision enforcing the controversial rule since its passage by Congress as part of the Small Business Jobs Act of 2010.

As brief background, prior to the 2010 Jobs Act, the Government had difficulty proving damages under the False Claims Act where a contractor misrepresented its size or socio-economic status to win set-aside government contracts. Practically speaking, the Government rarely suffers any actual economic harm in such cases. The fact that an ineligible firm improperly receives a contract set aside for small businesses may violate public policy, but it rarely increases the price of the contract.

Keep reading this article at: http://www.mondaq.com/article.asp?articleid=514216 

Filed Under: Contracting News Tagged With: 8(a), false claims, False Claims Act, fraud, misrepresentation, presumption of loss, resumed loss, SBA, small business, Small Business Jobs Act

New rule implements ‘presumption of loss’ over small business misrepresentation

July 12, 2013 By ei2admin

A new rule goes into effect Aug. 27, 2013 implementing a “presumption of loss” of the entire dollar value of any contract given to small businesses that  misrepresent their status.

The rule makes the basis of damages for a civil lawsuit equal to the value of the full  contract.

The government will consider any misrepresentation to be intentional after a  business registers itself as small in any federal database or submits a bid for  a contract as a small business.

The rule, which implements provisions from the 2010 Small Business Jobs Act, does limit liability in cases of unintentional error, technical  malfunction, “or other similar situations.” The Small Business Administration  found 200 firms that misrepresented their size in 2010.

Keep reading this article at: http://www.fiercegovernment.com/story/new-rule-implements-presumption-loss-over-small-business-misrepresentation/2013-07-08?utm_medium=nl&utm_source=internal 

Filed Under: Contracting News Tagged With: certification, False Claims Act, false statement, fraud, misrepresentation, presumption of loss, SAM, SBA, small business, small business goals, Small Business Jobs Act, System for Award Management

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