Daily Press (Sunday)

Company sought relief loan despite $1.3B contract awards

- By Kimberly Pierceall Staff writer

VIRGINIA BEACH — Here’s a riddle: What Virginia Beachbased company won more than $1 billion worth of government contracts in the last quarter of 2019 and had another $1.3 billion in contract obligation­s for 2020, yet still applied for a COVID-19 relief loan worth between $2 million and $5 million intended for small businesses?

The answer: ADS Inc., or Atlantic Diving Supply, which had been accused as recently as last year by the Small Business Administra­tion Office of Government Contractin­g of masqueradi­ng as a small enterprise in order to get contracts meant for small businesses. ADS appealed and won, saying it had less than 500 employees, and disputed allegation­s it was affiliated with other companies despite earlier settlement­s.

Earlier this week, ADS found itself front and center in a recent report from a nonprofit called the Project on Government Oversight, because it was among the thousands of businesses to seek pand e mi c- b a s e d relief through the federal government’s Paycheck Protection Program. The program offered potentiall­y forgivable loans to small businesses so long as they kept their employees on payroll and used the money to keep the lights on or pay their rent or mortgage. The list released by the government includes who was approved for loans and a range for an amount, but it doesn’t confirm that the companies took a loan for the full amount, if at all.

The report rehashes much of what The Virginian-Pilot and Washington Post have already reported about the recent history of ADS, ranked as the 22nd largest government contractor in fiscal year 2019 and top contractor for just the Defense Logistics

Agency for its $3.2 billion in contracts that year, according to Bloomberg Government. A whistleblo­wer first sued ADS on behalf of the U.S. government in 2013, alleging the company falsely claimed it was a small business in order to qualify for contracts by secretly controllin­g related business entities.

The company settled with the Justice Department in 2017 for $16 million without admitting any wrongdoing. The company said at the time that the settlement

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