A settlement has been reached to resolve False Claims Act allegations against Zoladz Construction Company Inc (ZCCI), Arsenal Contracting LLC (Arsenal), and Alliance Contracting LLC (Alliance), along with two owners, John Zoladz and David Lyons.
The allegations arose from a lawsuit that claimed Zoladz Construction Company Inc (ZCCI), Arsenal Contracting LLC (Arsenal), and Alliance Contracting LLC (Alliance), along with two owners, John Zoladz and David Lyons of improperly obtaining federal set-aside contracts designated for service-disabled veteran-owned (SDVO) small businesses.
Only small business owned and operated by service-disabled veterans are eligible to receive SDVO set-aside contracts.
According to the government, allegedly ZCCI recruited a service-disabled veteran to serve as the purported owner and manager of Arsenal, which was merely a front for securing SDVO set-aside contracts. Arsenal then subcontracted nearly all of the work under those SDVO contracts to Alliance and ZCCI. Additionally, the owners allegedly made false representations to the U.S. Department of Veterans Affairs regarding Arsenal’s eligibility for SDVO contracts.
“Contracts are set aside for service-disabled veteran-owned small businesses so to afford veterans with service-connected disabilities the opportunity to participate in federal contracting and gain valuable experience to help them compete for future economic opportunities,” said Acting Assistant Attorney General Chad A. Readler of the Justice Department’s Civil Division. “Every time an ineligible contractor knowingly pursues and obtains such set-aside contracts, they are cheating American taxpayers at the expense of service-disabled veterans.”
The allegations were brought forward by a whistleblower, who will receive $450,000 as a result of the settlement.
