GS Foods pays $950K to settle bidding contract allegations GS Foods Group Inc. (GS Foods) has agreed to pay nearly $950K to settle bidding contract allegations. The California-based company was the focus of a breach of the False Claims...
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GS Foods Group Inc. (GS Foods) has agreed to pay nearly $950K to settle bidding contract allegations.
The California-based company was the focus of a breach of the False Claims Act (FCA) regarding bidding contracts reserved for small businesses. It was discovered that despite being involved in the bidding, GS Foods did not qualify for small business status.
The settlement resulted in action by the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, Department of Justice, Office of Inspector General (DOJ-OIG). Fraud Section Senior Trial Counsel Jonathan H. Gold agreed to pay GS Foods $949,696.90.
GS Foods agrees to settle FCA breaches
“It is a disservice to small businesses when contracts that were expressly set aside to create opportunities for small businesses are awarded to ineligible organizations,” said Special Agent in Charge Andrew Hartwell of DOJ-OIG, Fraud Detection Office.
From 2018 until 2024, GS Foods was not recognized as a small business due to its ties with other companies in the United States. The company’s subsidiaries, GoodSource Solutions Inc. and Dori Foods Inc., actively bid on contracts reserved for small businesses despite their parent company’s status.
These contracts argued that the Justice Department “had been expressly reserved or set aside exclusively for small businesses. As a result, GoodSource Solutions and Dori Foods allegedly obtained contracts for which they were not eligible.”
According to the settlement documents, the financial penalty considered GS Foods’ proactive remedial measures to comply with the investigation.
The report stated that the food company “took remedial measures, including updating its code of conduct, establishing an Ethics and Compliance Management Committee, establishing the position of Chief Compliance Officer, and developing and implementing additional employee training.”
Special Agent Hartwell concluded, “The Department of Justice Office of the Inspector General is committed to playing our part to maintain the integrity of small business contracts.”
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