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ASBCA Delivers Bad News to Contractor Who Violated SBA’s Nonmanufacturer Rule

Client Alert | less than 1 min read | 05.27.16

In Third Coast Fresh Distrib., LLC (Apr. 6, 2016), the ASBCA held that a small business’ failure to comply with the requirements of the SBA’s Nonmanufacturer Rule justified its default under a small business set-aside contract for produce delivery. Rejecting the contractor’s argument that it was only required to represent in good faith that it would comply with the requirements, the Board held that the rule was a condition of performance and, by subcontracting out delivery of the produce, the contractor had changed its performance and had become “other than small” for the procurement, which constituted a default.

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Client Alert | 3 min read | 11.21.25

A Sign of What’s to Come? Court Dismisses FCA Retaliation Complaint Based on Alleged Discriminatory Use of Federal Funding

On November 7, 2025, in Thornton v. National Academy of Sciences, No. 25-cv-2155, 2025 WL 3123732 (D.D.C. Nov. 7, 2025), the District Court for the District of Columbia dismissed a False Claims Act (FCA) retaliation complaint on the basis that the plaintiff’s allegations that he was fired after blowing the whistle on purported illegally discriminatory use of federal funding was not sufficient to support his FCA claim. This case appears to be one of the first filed, and subsequently dismissed, following Deputy Attorney General Todd Blanche’s announcement of the creation of the Civil Rights Fraud Initiative on May 19, 2025, which “strongly encourages” private individuals to file lawsuits under the FCA relating to purportedly discriminatory and illegal use of federal funding for diversity, equity, and inclusion (DEI) initiatives in violation of Executive Order 14173, Ending Illegal Discrimination and Restoring Merit-Based Opportunity (Jan. 21, 2025). In this case, the court dismissed the FCA retaliation claim and rejected the argument that an organization could violate the FCA merely by “engaging in discriminatory conduct while conducting a federally funded study.” The analysis in Thornton could be a sign of how forthcoming arguments of retaliation based on reporting allegedly fraudulent DEI activity will be analyzed in the future....

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