Illinois-Based Charter School Management Company To Pay $4.5 Million To Settle Claims Relating To E-Rate Contracts

Concept Schools, NFP, has agreed to pay $4.5 million as part of a civil settlement to resolve allegations that it violated the False Claims Act by engaging in non-competitive bidding practices in connection with the Federal Communications Commission’s (FCC) E-Rate Program, the Department of Justice announced today. 

The E-Rate Program, created by Congress in the Telecommunications Act of 1996, subsidizes eligible equipment and services to make internet access and internal networking more affordable for needy public schools and libraries. 

“Today’s settlement demonstrates our continuing vigilance to ensure that those doing business with the government do not engage in anticompetitive conduct,” said Acting Assistant Attorney General Jeffrey Bossert Clark for the Department of Justice’s Civil Division.  “Government contractors and schools that seek to profit at the expense of taxpayers will face serious consequences.”

The United States alleged that Concept Schools, a charter school management company located in Des Plaines, Illinois, rigged the bidding for E-Rate contracts between 2009 and 2012 in favor of chosen technology vendors so that its network of charter schools located in several states, including Illinois, Ohio, and Indiana, selected the chosen vendors without a meaningful, fair and open bidding process.  Additionally, the government alleged that Concept Schools’ chosen vendors provided equipment at higher prices than those approved by the FCC for equipment with the same functionality.  The government also contended that Concept Schools failed to maintain sufficient control over equipment reimbursed by the FCC, some of which was discovered missing.

Contemporaneous with the civil settlement, Concept Schools has agreed to enter into a corporate compliance plan with the FCC.

“E-Rate contractors and schools receiving E-Rate funds must understand and know that actions that undermine the contracting process, such as conspiring to rig competitive bidding, will not be tolerated and will be investigated aggressively,” said David L. Hunt, Inspector General of the FCC.

The settlement was the result of a coordinated effort by the Civil Division’s Commercial Litigation Branch, the FCC Office of Inspector General, the Federal Bureau of Investigation, and the U.S. Department of Education Office of Inspector General.     

The claims resolved by the settlement are allegations only, and there has been no determination of liability. 

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Author: November 3, 2020

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