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SBA Cannot Replace Agency Responsibility Findings with Its Own

Client Alert | less than 1 min read | 09.30.11

In Spiral Solutions & Techs., Inc., the Small Business Administration’s Office of Hearings and Appeals (“OHA”) reversed a size decision finding a violation of the ostensible subcontractor rule because the SBA Area Office improperly made findings on matters of responsibility--matters reserved for the contracting officer.  Additionally, OHA explained that Spiral’s hiring of its subcontractor’s incumbent, non-management personnel is no longer indicative of “undue reliance” in light of Executive Order 13,495, which encourages companies to offer a right of first refusal of employment to qualified employees performing under a predecessor contract for similar services at a particular location.

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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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