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Government Contractors Agree to Pay $3.9 Million to Resolve Claims of Misrepresenting Women-Owned Small Business Status

U.S. Attorney's Office    
Eastern District of Virginia
January 30, 2024


ALEXANDRIA, Va. – QuarterLine Consulting Services, LLC, and its parent company, Planned Systems International, Inc. (PSI), both located in Arlington, agreed to pay $3.9 million to resolve allegations that QuarterLine made false statements about its women-owned small business (WOSB) status to obtain a Defense Health Agency (DHA) task order that was set aside for WOSBs to provide physicians to an Air Force military treatment facility.

“This settlement demonstrates my office’s commitment to ensuring a fair and honest playing field for companies who are called on to support the Department of Defense, and in this case, provide medical care to those serving our country,” said Jessica D. Aber, U.S. Attorney for the Eastern District of Virginia.

“The Defense Criminal Investigative Service is committed to rooting out fraud and corrupt schemes, which undermine the integrity of the Department of Defense procurement process,” said Christopher Dillard, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) Mid-Atlantic Field Office. “DCIS working together with its law enforcement partners will continue to ensure the DoD contracting process remains fair and competitive.”

“Government contractors are expected to be honest in their dealings with the government,” said Floyd Martinez, Special Agent in Charge, General Services Administration (GSA) Office of Inspector General. “GSA OIG special agents and our investigative partners are committed to holding accountable those who misrepresent themselves in order to obtain federal contracts.”

“This is the latest example of the dedication and relentless focus of Criminal Investigation Division Special Agents coupled with the wide network of partnerships with military investigation organizations and federal law enforcement partners,” said Special Agent in Charge Keith K. Kelly, of Department of the Army Criminal Investigation Command’s Fraud Field Office.

In July 2017, QuarterLine was awarded an indefinite delivery/indefinite quantity (IDIQ), multiple-award contract through the DHA. The DHA IDIQ allowed small businesses to compete for task orders to provide physician, nursing, and ancillary services to supplement the medical staff at military treatment facilities throughout the country. Federal agencies could further set aside task orders for participants in the SBA’s WOSB Federal Contract program or other socioeconomic programs to help the agency meet its small business contracting goals.

At the time of the DHA IDIQ award, QuarterLine was a WOSB and eligible to compete for set-aside task orders. In December 2018, QuarterLine was acquired by PSI, which caused QuarterLine to forfeit its WOSB status. QuarterLine was required to update its size certifications in GSA’s System for Award Management (SAM) within 30 days of the acquisition.

In January 2019, the Air Force issued a task order proposal request through the DHA IDIQ for physician-anesthesiologists to support the military treatment facility at Joint Base San Antonio. The task order was set aside for women-owned small businesses. The United States alleged that QuarterLine submitted a proposal for the task order in which QuarterLine falsely represented that it was a WOSB and that its SAM representations were current, complete, and accurate. The United States also alleged that QuarterLine submitted false representations about its size status in response to requests from the task order’s contracting official. Based on QuarterLine’s representations, the Air Force awarded the task order to QuarterLine.

PSI and QuarterLine agreed to pay $3.9 million to resolve the United States’ claims that they misrepresented QuarterLine’s WOSB status to obtain the task order. The civil claims are allegations only; there has been no admission of liability. PSI and QuarterLine provided substantial cooperation during the investigation.

The settlement arises in connection with a lawsuit filed under the whistleblower provision of the False Claims Act. A whistleblower suit, or qui tam action under the False Claims Act, is commenced by an individual filing a complaint under seal in the U.S. District Court and providing a copy of the complaint and evidence to the U.S. Attorney’s Office. The United States then has an opportunity to investigate the claims. The False Claims Act provides whistleblowers with a share of the government’s recovery.

The outcome in the case was the result of a coordinated effort between the U.S. Attorney’s Office for the Eastern District of Virginia, the U.S. Department of Defense Office of Inspector General, DCIS, the U.S. Air Force Office of Special Investigations, Army CID, and GSA’s Office of Inspector General.

The case was prosecuted by Assistant U.S. Attorney William Hochul III and assisted by Forensic Auditor Peter Melaragni.

The case caption is United States ex rel. The Arora Group, Inc. v. Planned Systems International, Inc., No. 1:21-cv-657 (E.D. Va.). A copy of this press release may be found on the website of the U.S. Attorney’s Office for the Eastern District of Virginia.



Source: U.S. Attorney's Office press release