GS Foods Group Inc. Agrees to Pay Nearly $1 Million to Settle Allegations of Misusing Small Business Contracts for U.S. Government Projects

GS Foods Group Inc., based in Ontario, California, has agreed to pay $949,696 to resolve allegations of False Claims Act violations after bidding on contracts reserved for small businesses despite not meeting the eligibility requirements.

These contracts involved supplying food to U.S. facilities managed by the Federal Bureau of Prisons and U.S. Immigration and Customs Enforcement.

The company has cooperated with the government throughout the investigation and has taken steps to rectify the situation.

Allegations of False Claims and Ineligibility for Small Business Contracts

The allegations center around GS Foods’ subsidiaries, GoodSource Solutions Inc. and Dori Foods Inc., which reportedly bid on contracts specifically set aside for small businesses between October 1, 2018, and March 8, 2024.

According to the U.S. government, these companies did not qualify for such contracts due to their affiliations with other larger companies.

As a result, the subsidiaries obtained contracts intended for small business entities.

GS Foods’ Cooperation and Remedial Actions

In response to the allegations, GS Foods took immediate action by self-reporting the issue to the Department of Justice and cooperating fully with the investigation.

The company provided key documents, identified witnesses, and made employees available for interviews.

Additionally, GS Foods implemented several remedial measures, such as updating its code of conduct, establishing an Ethics and Compliance Management Committee, appointing a Chief Compliance Officer, and expanding employee training programs.

Justice Department’s Commitment to Protecting Small Business Opportunities

Acting Assistant Attorney General Brett A. Shumate emphasized the importance of adhering to small business contracting regulations.

He stated that businesses found in violation of these rules can mitigate consequences through timely self-disclosures, cooperation, and corrective actions.

Special Agent in Charge Andrew Hartwell from the DOJ Office of Inspector General (DOJ-OIG) further commented on the impact of such violations on small businesses, noting that it undermines the opportunities set aside for them.

Settlement Reached Through Coordinated Efforts

The settlement was achieved through the collaborative efforts of the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and DOJ-OIG.

Senior Trial Counsel Jonathan H. Gold led the investigation on behalf of the Fraud Section.

It’s important to note that while the settlement resolves the allegations, there has been no formal determination of liability in this case.

This resolution highlights the importance of maintaining integrity in small business contracting programs and the role of the Justice Department in ensuring these opportunities are protected.

This article was published on TDPel Media. Thanks for reading!

Share on Facebook «||» Share on Twitter «||» Share on Reddit «||» Share on LinkedIn