Gose v. Native American Services Corporation
By Ryan M. Lichtenstein
In Gose v. Native American Services Corporation, the Eleventh Circuit addressed whether a business that graduated from the Minority Small Business and Capital Ownership Development Program (8(a) program) was still considered a “participant,” and thus subject to the program’s ownership and control requirements, when the business continued to work on contracts initially won through the 8(a) program. The court then addressed whether an actionable claim exists under the False Claims Act (FCA) by violating the program’s requirements. The Eleventh Circuit ultimately answered yes to both, finding that the defendants were still participants in the 8(a) program, subject to the program’s requirements, and that, based on those requirements, that the complaint particularly stated plausible claims under the FCA.
Congress created the 8(a) program to give businesses that the Small Business Administration (SBA) certifies as “small” and “disadvantaged” preferential treatment in the bidding process for certain government contracts. A business is considered a participant in the program once it is admitted by the SBA, and then is eligible to bid on certain government contracts, which include indefinite-delivery-indefinite-quantity (IDIQ) contracts. Generally, once a participant has won an IDIQ contract, it may bid on task orders the government requests under the contract for a certain period of time. Although businesses ultimately graduate from the 8(a) program, a business must complete previously awarded IDIQ contracts and may continue to bid on task orders for that same contract. But contracts won under the 8(a) program must terminate for the convenience of the government “if one or more individuals upon whom eligibility for the [8(a) program was based loses ownership or control of the participant]” unless a waiver is sought and approved by the SBA.
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