False Claims Act | The Contracting Education Academy

March 16, 2021 By cs

Federal contractor agrees to pay more than $6 million to settle overbilling allegations

Virginia-based Information Innovators Inc. (Triple-I) has agreed to pay the United States $6.05 million to resolve allegations that a predecessor company, Creative Computing Solutions Inc. (CCSi), violated the False Claims Act by knowingly overbilling the U.S. Department of Homeland Security (DHS) for work performed by CCSi employees who lacked required job qualifications.

Triple-I, which provides IT services and solutions to federal agencies, acquired Maryland-based CCSi in 2015. CCSi formerly provided IT services to DHS pursuant to an Enterprise Acquisition Gateway for Leading Edge Solutions Contract (EAGLE contract). The settlement resolves allegations that, from October 2007 to April 2014, CCSi knowingly submitted claims for payment to DHS for work performed by CCSi employees who lacked required job qualifications. CCSi allegedly violated the terms of the EAGLE Contract by using under-qualified personnel who were billed to DHS at higher rates reserved for more qualified employees.

“Contractors that knowingly overcharge the government will be held accountable,” said Acting Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will ensure that that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with their contractual commitments.”

“Defense contractors are required to bill for costs actually incurred, and to be truthful in the claims they submit to federal agencies,” said Acting U.S. Attorney Jonathan F. Lenzner for the District of Maryland. “The U.S. Attorney’s Office and our partners are committed to protecting taxpayer dollars and ensuring integrity and compliance with federal agency standards.”

“DHS OIG remains committed to protecting government programs, and American taxpayers who contribute to them, from fraudsters,” said Inspector General Joseph V. Cuffari. “Our agency, working closely with our law enforcement partners, will continue to root out these unlawful contracting fraud schemes.”

The settlement was a result of a joint investigation by the DOJ’s Civil Division’s Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the District of Maryland, and the Department of Homeland Security Office of the Inspector General’s Major Frauds and Corruption Unit. The claims resolved by the settlement are allegations only and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-more-6-million-settle-overbilling-allegations

February 19, 2021 By cs

What to expect for False Claims Act enforcement under new Administration

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

Under President Obama, DOJ’s FCA recoveries hit all-time peaks, totaling over $5 billion in 2012, $6.1 billion in 2014, and $4.9 billion in 2016. From there, they trended consistently downward throughout the Trump Administration, averaging under $3 billion annually. Given the Biden Administration’s focus on tackling the COVID-19 pandemic and stimulating the economy, we anticipate that DOJ’s scrutiny of alleged fraud in government programs will be as probing as ever.

In the 1980s, then-Senator Biden supported the seminal 1986 amendments to the FCA, emphasizing in his Senate remarks that enforcement should enjoy bipartisan support: “Fraud against the Government is not a matter that ought to be used for political advantage. . . . It is not a matter that divides Democrats from Republicans.”

More recently, as Vice President under President Obama, Biden famously oversaw the 2009 Recovery Act in the wake of the 2008 financial crisis and touted the lower-than-average rate of fraud investigations into the stimulus spending. In 2011, he also led the Government Accountability and Transparency Board to advance efforts to detect and remediate fraud, waste, and abuse in federal programs as part of the “Campaign to Cut Waste.” When announcing this campaign, he underscored his commitment “to changing the way government works and . . . stepping up the hunt for misspent dollars.”

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/1035290/what-to-expect-for-false-claims-act-enforcement-under-the-biden-administration

January 27, 2021 By cs

Cybersecurity and government contracting: False Claims Act considerations

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

In the federal contracting community, it has long been predicted that the government’s increased cybersecurity requirements will eventually lead to a corresponding increase in False Claims Act (FCA) litigation involving cybersecurity compliance. This prediction may soon be proven true, as a December 2020 speech from Deputy Assistant Attorney General Michael Granston specifically identified “cybersecurity related fraud” as an “area where we could see enhanced False Claims Act activity.”

This post discusses recent efforts to use the FCA to enforce cybersecurity compliance — and, based on those efforts, what government contractors may expect to see in the future.

In recent years, the government and qui tam plaintiffs have begun using the FCA to pursue alleged noncompliance with cybersecurity regulations, and some of these efforts have gained traction. For instance, in May 2019, a federal district court in California declined to dismiss a case alleging that a government contractor had falsely asserted its compliance with cybersecurity standards when entering into Department of Defense contracts. And in July 2019, the Department of Justice announced that another contractor had agreed to pay more than $8 million in connection with resolving a qui tam suit alleging failure to meet federal cybersecurity standards, marking the first settlement based on FCA allegations related to cybersecurity noncompliance.

More recently, however, at least one court rejected the attempt to build an FCA case out of alleged deviations from cybersecurity regulations.

Keep reading this article at: https://www.insidegovernmentcontracts.com/2021/01/cybersecurity-and-government-contracting-false-claims-act-considerations/

January 8, 2021 By cs

Judge rules that lying about 8(a) eligibility violates False Claims Act

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

The new case is United States ex rel. Montes v. Main Building Maintenance Inc., and the decision was issued on December 22, 2020, by Judge Jason Pulliam of the Western District of Texas.

This is a qui tam case brought under the False Claims Act by a whistleblower, or “relator” as it’s called under that statute. The relator alleges that two parents, Robert and Elvira Ximenes, created a company, JXM, to bid on government contracts reserved (or, in technical terms, “set aside”) for contractors that qualified for the so-called “8(a) Business Development program” for small businesses that are owned by “socially and economically disadvantaged people or entities.”

To qualify for such set-aside contracts, the business must first be “certified” as eligible by the Small Business Administration (SBA). And to be eligible for such certification, the business must make a series of representation to SBA about who both owns the business, and who controls the business.

Keep reading this article at: https://www.natlawreview.com/article/federal-judge-texas-rules-lying-about-eligibility-8a-business-development-program

December 18, 2020 By cs

Court of Appeals issues important decision on application of False Claims Act to set-aside contracts

On December 3, 2020, the United States Court of Appeals for the Second Circuit issued its decision in United States v. Strock, a ruling that will significantly strengthen the hand of the government, and of qui tam whistleblowers, in False Claims Act cases against companies awarded government set-aside contracts but do not meet the requirements of the particular set-aside.

The contracts at issue in Strock were set aside for service-disabled, veteran-owned small businesses (SDVOSBs).

Still, the Court’s reasoning also applies to other types of set-aside contracts, such as small business, women-owned small business, or HUBZone set-asides. This decision should hearten whistleblowers who have information about fraud in government contracting set-aside programs.

The Facts Of United States v. Strock

The government sued Strock Contracting, its owner Lee Strock, and one of Strock’s employees. The government alleged that Strock set up a new company called Veteran Enterprises Company (VECO) to bid on SDVOSB-reserved contracts from the Army, Air Force, and Veterans Administration. Strock, however, was not a disabled veteran. Instead, he recruited another individual, a disabled veteran named Terry Anderson.

Keep reading this article at: https://www.natlawreview.com/article/court-appeals-issues-important-decision-application-false-claims-act-to-set-aside

Read the full decision in this case at: https://www.ca2.uscourts.gov/decisions/isysquery/36dc4bcd-69b0-4890-b0e2-56e98757e39f/3/doc/19-4331_opn.pdf#xml=https://www.ca2.uscourts.gov/decisions/isysquery/36dc4bcd-69b0-4890-b0e2-56e98757e39f/3/hilite/

Although Department of Justice (DOJ) recoveries under the False Claims Act (FCA) reached historic lows in FY2020, President Biden’s administration is poised to usher in a return to aggressive FCA enforcement.

As the recent SolarWinds Orion attack makes clear, cybersecurity will be a focus in the coming years for both governmental and non-governmental entities alike.

Another court has joined the growing chorus of judges who are singing the same tune on set-aside fraud: when a government contractor lies about its eligibility for a set-aside contract, it violates the False Claims Act, and can be sued by either the Department of Justice or a whistleblower.

The Facts Of United States v. Strock

Search this Website