Hensel Phelps Construction Co. agreed to pay $2.8 million to resolve allegations that it participated in subcontracting fraud, but laid the blame for the scheme on a kitchen equipment subcontractor that settled its own case earlier this year.
The allegations were related to Hensel Phelps’ 2011 contract with the U.S. General Services Administration to build a commons and health-care building for the Armed Forces Retirement Home in Washington, D.C. The project was completed in 2013.
As part of the contract, Hensel Phelps provided opportunities for service-disabled, veteran-owned small businesses (SDVOSB) to work on the project. It ostensibly found such a subcontractor to provide kitchen equipment for the project, but a False Claims Act lawsuit filed by Fox Enterprises Unlimited LLP alleged that TriMark USA LLC, a large subcontractor ineligible for SDVOSB status, actually provided the services.
The companies then used an actual SDVOSB as a passthrough in exchange for a 1.5% fee, allowing Hensel Phelps to claim financial credit from the government for working with an eligible small business, say Carla Freedman, U.S. attorney for northern New York, and Vanessa Waldref, U.S. attorney for eastern Washington.
Hensel Phelps and TriMark had negotiated the subcontract before the SDVOSB entered the deal, the settlement states.
“Taking advantage of contracts intended for companies owned and operated by service-disabled veterans demonstrates a shocking disregard for fair competition...
“When companies use kickbacks to influence prescribing, they erode trust in healthcare providers,” said special agent Helsing. Takeda Pharmaceuticals, U.S.A. Inc has agreed to $13,670,921 amid alle...