Newport News company hit with $2.6M fine over small business set-asides

A Newport News company has been slapped with a $2.6 million fine to resolve allegations that it took small business set-aside contracts that it wasn’t qualified for.

According to the Justice Department, R&K Enterprises Inc., a government contractor headquartered in Newport News that has 74 locations nationwide, rolled over a contract to another company, K&P Management Inc., and represented the two companies were not affiliated.

The DOJ alleged that, under the applicable rules, the two companies were affiliated based on several factors, including that the wife of R&K’s owner owned K&P, all of K&P’s purported revenue came from R&K, the two companies shared executives, and R&K exercised control over K&P.

As a result, per the DOJ, R&K should have included K&Ps revenue in R&K’s calculation of its size.

“Small business set-aside contracts assist small businesses to compete,” said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division. “When ineligible companies fraudulently obtain contracts reserved for small businesses, they prevent the small business community from receiving the contracting opportunities that Congress intended.”

“My office is committed to identifying, investigating and eradicating attempts to exploit programs intended to protect competition for contracts,” said Jessica D. Aber, the U.S. Attorney for the Eastern District of Virginia. “The complex, multi-agency investigation that culminated in this settlement exemplifies the importance of strong partnerships that maximize our expertise and authority to effectively enforce the law.”