![]() Generally, receipts are considered “total income”. (a) Receipts means all revenue in whatever form received or accrued from whatever source, including from the sales of products or services, interest, dividends, rents, royalties, fees, or commissions, reduced by returns and allowances. Those regulations state, in relevant part: ![]() § 121.104(a), which address how “receipts” are to be calculated for federal contracting size purposes. In reaching its conclusion on the issue of “falsity,” the court parsed the applicable version of the SBA’s regulations at 13 C.F.R. On this issue, the court ruled in favor of the plaintiff, finding that the defendants had wrongly deducted “flowthrough income” - i.e., “reimbursement for expenses incurred on behalf of and for the benefit of customers” - when calculating the company’s “receipts,” rending their size representations false. After discovery, the parties cross-moved for summary judgment on various issues, including whether the defendants’ certifications regarding their average annual “receipts” were, in fact, false. Subsequently, the plaintiff filed a qui tam whistleblower lawsuit under the FCA, alleging that the defendants had falsely certified that their average annual receipts were under $7.5 million. Small Business Administration (SBA) and lost. The plaintiff, a disappointed bidder, filed a size protest with the U.S. To qualify for this procurement, contractors were required to have averaged under $7.5 million in annual “receipts” over the past three years. ![]() The defendants, a federal contractor and its owners, submitted a bid for, and were awarded, a small business, set-aside contract with the Internal Revenue Service (IRS). The key facts, holdings, and takeaways from this noteworthy case are discussed below. CWS Marketing Group, Inc., et al., recently issued a decision in a False Claims Act (FCA) case that has potentially far-reaching implications for small-business government contractors and how they calculate and report their average annual “receipts” for size purposes. District Court for the District of Columbia, in U.S. ![]()
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