Partially in response to reports on federal benefit and healthcare fraud, the current administration established a White House Task Force to Eliminate Fraud, led by the Vice President. One area of particular concern to the government is home health care fraud. In particular, fictitious organizations bill the government for services never provided. One key indicator is a significant number of organizations sharing an address.
Apparently, concern about entities sharing an address is not limited to health care fraud. GSA has recently been scrutinizing virtual office locations and sending messages to organizations that have a virtual office location listed as their business address in SAM.gov.
The basis for this is the regulations surrounding CAGE codes. Operated by the Defense Logistics Agency, CAGE codes are required for all government contractors. The regulations governing CAGE codes require an individual physical address for each CAGE code. Those regulations prohibit CAGE codes for multiple entities at the same address and prohibit assigned a CAGE code to entities that use “a short-term virtual location, such as mobile offices, commercial packaging/mailing facilities (e.g., UPS stores, FedEx stores), mailbox rentals and certain business incubator locations if the majority of the operations are not performed from that incubator location.”
In the past, these restrictions have not always been enforced. Now, the government is paying more attention to virtual offices. Government contractors (and grant applicants) will have to identify unique addresses. Both the regulations and GSA’s help desk recommend using the home address of an officer of the company or a board member in the event the organization lacks a physical address that complies with the regulations.
This process has been difficult for some companies to navigate. Centre stands ready to assist if that is the case. More importantly, the government will continue to increase its enforcement of previously overlooked requirements as it attempts to identify and eliminate fraud. Innocent companies will get caught up in this effort.
Should you get caught up, or if you want to get ahead of increased enforcement, please reach out to Brandon Graves, or any other Centre attorney.
