False Claims Act | The Contracting Education Academy

December 3, 2020 By cs

Contractor agrees to pay $18.98 million for alleged overcharges and use of unqualified labor

Cognosante LLC has agreed to pay the United States $18,987,789 to resolve allegations that it violated the False Claims Act by using unqualified labor and overcharging the United States for services provided to government agencies under two General Services Administration (GSA) contracts, the Justice Department.

Cognosante, which is headquartered in Falls Church, Virginia, provides health care and IT services and solutions to federal agencies.

GSA’s Multiple Award Schedule (MAS) contracts allow the federal government to leverage its buying power to achieve favorable pricing. Under MAS contracts, contractors negotiate with GSA to set maximum prices for goods and services subsequently ordered by agencies across the federal government. These contracts provide streamlined access to the federal marketplace.

The settlement resolves allegations that Cognosante overcharged the United States for services performed under two GSA MAS contracts, including by providing false information concerning Cognosante’s commercial discounting practices during contract negotiations. It also resolves allegations that Cognosante charged the United States for labor that failed to meet the qualifications in one of the contracts.

Cognosante investigated and disclosed to the United States the contractual violations resolved in the settlement. It received credit for its disclosure and cooperation.

The settlement was the result of a joint investigation by the GSA OIG, the U.S. Attorney’s Office for the District of Columbia, and the Civil Division’s Commercial Litigation Branch. The claims resolved by the settlement agreement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-1898-million-alleged-false-claims-act-caused-overcharges-and

November 11, 2020 By cs

Supreme Court may clarify what qualifies as a ‘false claim’

Until recently, it was well-accepted that a violation of the False Claims Act (FCA) occurs only when there is a misrepresentation that is objectively false.

Four circuits — the Fourth, Seventh, Tenth and Eleventh — had adopted this “objective falsity” standard. In March 2020, however, the Third and Ninth Circuits issued decisions departing from this view, holding that objective falsity is not required and “legal falsity” can suffice. These decisions created a stark circuit split with profound implications for government contractors, and there is now a pending petition to the Supreme Court to address and clarify the matter.

First, a refresher: The FCA does not define “false or fraudulent,” leaving courts to look to common law to interpret what constitutes a “false” claim. Many circuits had found that a representation must be objectively false to qualify as a false claim, meaning that a false claim cannot arise where there is a genuine dispute and a claim is alleged to be false based on a subjective assessment. The Third Circuit was among those endorsing this view, holding that under the FCA “a statement is ‘false’ when it is objectively untrue,” United States ex rel. Thomas v. Siemens AG, 593 F. App’x 139, 143 (3d Cir. 2014), and that “expressions of opinion, scientific judgments or statements as to conclusions which reasonable minds may differ cannot be false.” United States ex rel. Hill v. Univ. of Med. & Dentistry of N.J., 448 F. App’x 314, 316 (3d Cir. 2011).

Keep reading this article at: https://governmentcontractsnavigator.com/2020/11/10/what-qualifies-as-a-false-claim-supreme-court-may-clarify/

October 20, 2020 By cs

Nonprofit to pay $1.9 million to settle false claims and kickback allegations on federal contracts for blind workers

Industries for the Blind and Visually Impaired Inc. (IBI) has agreed to pay $1,938,684.09 to resolve allegations that IBI violated the False Claims Act and the Anti-Kickback Act in connection with certain federal contracts set aside to employ blind workers, the Justice Department has announced.

IBI is a nonprofit corporation headquartered in West Allis, Wisconsin that receives set-aside contracts from federal agencies under the federal government’s Ability One Program. In exchange, IBI agrees to give jobs to workers who are blind or visually-impaired and comply with other contractual requirements.

The settlement resolves allegations that, between 2009 and 2018, IBI misrepresented to the U.S. Ability One Commission when requesting set-aside contracts for furniture design and installation services that it would maintain a 3:1 blind-to-sighted ratio of employees, and that furniture designers and sales representatives working for IBI took impermissible payments and gifts from manufacturers on certain contracts. It also resolves claims that IBI improperly subcontracted a set-aside contract for screen-printed clothing to an entity that did not generally use blind labor.

The Ability One Commission operates under the authority of the Javits-Wagner-O’Day Act (JWOD Act), which was passed in 1971 to increase employment and training opportunities for persons who are blind or visually impaired, or who have disabilities so severe that they are otherwise unable to work at competitive employment. More than 400 companies participate in the AbilityOne Program and receive set-aside federal contracts in exchange for employing approximately 45,000 people who are blind or have severe disabilities.

Among the allegations resolved by the settlement are claims asserted in a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery. The lawsuit was filed by Paul Inzeo, formerly a marketing manager at IBI, whose share has not yet been decided.

The settlement also resolves conduct that IBI investigated and disclosed to the United States concerning the receipt of gifts and money by its furniture designers and sales representatives that was not alleged in the whistleblower complaint. It received credit in the settlement for its disclosure, cooperation, and remediation efforts in connection with this conduct.

The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Wisconsin and the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from GSA’s Office of Inspector General, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Defense Contract Audit Agency, the AbilityOne Office of the Inspector General, and the U.S. Department of the Interior Office of Inspector General.

The claims resolved by the settlement are allegations only, and there has been no determination of liability. The lawsuit resolved by the settlement is captioned United States ex rel. Inzeo v. Industries for the Blind, Inc., et al., No. 15-cv-996 (E.D. Wisc.).

Source: https://www.justice.gov/opa/pr/wisconsin-based-nonprofit-pay-19-million-settle-allegations-false-claims-and-kickbacks

August 19, 2020 By cs

Money For nothing … except potential False Claims Act liability

Businesses and health care entities that receive CARES Act funds become attractive targets for whistleblowers and government auditors.

The Coronavirus Aid, Relief, and Economic Security (CARES) Act (P.L. 116-136) was passed by Congress and signed into law by President Trump on March 27, 2020. The CARES Act provides over $2 trillion of economic relief in order to protect the American people from the public health and economic impacts of COVID-19. Throughout its more than 300 pages, the CARES Act implements many initiatives targeted at various industries and economic sectors that are designed to stimulate cash flow and provide security for those at-risk.

The most notable provisions of the CARES Act impact individuals directly and include an expansion of unemployment benefits and direct payments to individuals under a certain income threshold. The CARES Act also provides protections for both large and small businesses, including $500 billion allotted for distressed industries, as well as $376 billion to small business in the form of various lending programs.

The CARES Act also appropriates $100 billion to establish the “CARES Act Provider Relief Fund” for the benefit of hospitals and other eligible health care providers for health care related expenses or lost revenues due to COVID-19, which was further supplemented in April 2020 with an additional $75 billion under the Paycheck Protection Program and Health Care Enhancement Act (PPP Act).

In addition, the CARES Act authorizes relief to federal contractors and subcontractors for paid sick leave incurred to keep workers in a ready-state. In order for businesses to take advantage of these funds, they are required to complete applications and make representations as to eligibility to receive the appropriated funds.

While such a massive infusion of cash into the US economy is welcome by individuals and businesses impacted by COVID-19, such payouts come with complex strings attached, and therefore present opportunities for companies and individuals to run afoul of federal law.

Keep reading this article at: https://www.mondaq.com/unitedstates/government-contracts-procurement-ppp/973148/money-for-nothingexcept-potential-false-claims-act-liability

The Contracting Education Academy at Georgia Tech has established a webpage where all contract-related developments related to the coronavirus (COVID-19) are summarized. Find the page at: https://contractingacademy.gatech.edu/coronavirus-information-for-contracting-officers-and-contractors/

July 14, 2020 By cs

Contractor to pay $1 million to settle claims of fraudulently representing airport work by small disadvantaged business

Williams Brothers Construction Inc. (WBCI) has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by misrepresenting its use of a small disadvantaged business to obtain a federally-funded construction contract, the Department of Justice (DOJ) has announced.

“The Disadvantaged Business Enterprise (DBE) Program of the Department of Transportation creates important opportunities for small businesses to participate in construction projects paid for with federal funds,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division. “We will hold accountable those who misrepresent their compliance with program requirements to obtain taxpayer funds to which they are not entitled, and thereby undermine the program’s goal of supporting small businesses.”

The settlement resolves claims arising from WBCI’s construction of a new terminal building at the Peoria International Airport using Federal Aviation Administration (FAA) grant funds, and is based on the following factors:

The FAA grant required the use of disadvantaged business enterprises for part of the construction.
DOJ contends that WBCI knowingly made false representations regarding its plans to use a disadvantaged small firm on the project and then falsified documents to make it appear that an eligible business did window, glazing, and curtain wall work.
Instead, WBCI allegedly used that business only as a pass-through and had the work done by an ineligible company.

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Central District of Illinois, and U.S. DOT’s Office of Inspector General.

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

Source: https://www.justice.gov/opa/pr/government-contractor-pay-1-million-settle-claims-fraudulently-representing-work-small

Until recently, it was well-accepted that a violation of the False Claims Act (FCA) occurs only when there is a misrepresentation that is objectively false.

Industries for the Blind and Visually Impaired Inc. (IBI) has agreed to pay $1,938,684.09 to resolve allegations that IBI violated the False Claims Act and the Anti-Kickback Act in connection with certain federal contracts set aside to employ blind workers, the Justice Department has announced.

Businesses and health care entities that receive CARES Act funds become attractive targets for whistleblowers and government auditors.

Williams Brothers Construction Inc. (WBCI) has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by misrepresenting its use of a small disadvantaged business to obtain a federally-funded construction contract, the Department of Justice (DOJ) has announced.

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