On June 9th, the United States Department of Justice announced that government contractors Broadway Electric Inc. (Broadway), Cornerstone Contracting Inc. (Cornerstone), and their executives will pay $21.3 million to settle allegations that they wrongly obtained federal contracts reserved for service-disabled veteran-owned small businesses and other eligible small businesses in violation of the False Claims Act (FCA).
The civil settlement arose after two whistleblowers, a veteran of the United States Air Force and an executive with a service-disabled veteran-owned small business (SDVOSB) firm, sued under the qui tam provisions of the FCA. These provisions allow private citizens and parties to file suit on behalf of the United States alleging an individual or company is defrauding the government. The whistleblowers in this case will receive a $3,674,250 award as part of the settlement agreement under the FCA.
The DOJ alleged Broadway, Cornerstone, and their executives engaged in a coordinated scheme from approximately April 2017 to May 2025 to defraud the U.S. Small Business Administration’s (SBA) set-aside contracts for SBVOSBs. The defendants allegedly obtained these contracts through purported SDVOSBs and other small businesses, though they are not service-disabled veterans or small businesses.
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