# Contractors Admit Pennsylvania Set-Aside Fraud

Former contractors Thomas E. Lauer and Rebecca J. Davis pleaded guilty in federal court in Pennsylvania to conspiring to obtain federal small-business set-aside contracts through ineligible or false representations. The case involved five 8(a) contracts at Letterkenny Army Depot worth more than **$80 million** collectively, plus a **$5.3 million** VA contract awarded in March 2013; the agreed combined restitution is approximately $12.45 million. The DoD, VA, and SBA inspector general offices were involved. The case concerns past awards, not a new bidding opportunity, and underscores the consequences of misrepresenting small-business eligibility and contract performance arrangements.

- Contractors pursuing 8(a) or SDVOSB set-asides should verify that eligibility and certification representations are accurate and supported, and that the prime contractor meets applicable performance requirements.
- Procurement and compliance teams can use the case to review how eligibility, ownership or control representations, and performance responsibilities are documented for set-aside awards.

**Jurisdictions:** federal
**Industries:** Defense & Military, Healthcare
**Topics:** Regulatory Compliance
**Published:** September 30, 2026

### Government Entities
- U.S. Department of Defense (DoD)
- U.S. Department of Veterans Affairs (VA)
- U.S. Small Business Administration (SBA)
- Letterkenny Army Depot
- U.S. Attorney’s Office for the Middle District of Pennsylvania

### Vendors
- Elstner Construction Company (ECC) (Awardee)
- Bon Secour Management (Awardee)

### Sources
- [MDPA: Lauer + Davis plead guilty — steered >$80M Letterkenny 8(a) set-asides + $5.3M VA SDVOSB contract; ~$12.4M combined restitution. DoD/VA/SBA OIGs. https://t.co/uZWKJdJFB1](https://x.com/FormerFeds/status/2105305919085011020) - twitter-small-business
- [Two Plead Guilty In Pennsylvania Federal Court To Multi-Million-Dollar Military Contract Fraud](https://www.tampafp.com/two-plead-guilty-in-pennsylvania-federal-court-to-multi-million-dollar-military-contract-fraud) - Tampa Free Press