Signed into law on November 2, 2015, the Bipartisan Budget Act of 2015 requires federal agencies to increase civil monetary penalties imposed by the FCA to account for inflation. The increase – referred to as a “catch up adjustment” – will be implemented through interim final rulemaking procedures under the Administrative Procedures Act and must be in place by August 1, 2016. The amount of the adjustment is based on the difference between the CPI in October of the calendar year in which the penalty was last adjusted and the CPI in October 2015. FCA penalties were increased to their present level in 1999. In addition, the Budget Act requires agencies to continue to make annual adjustments to penalties moving forward, also based on changes in the CPI. Those annual adjustments are automatic and will be implemented without rulemaking procedures or any agency assessment of the need for such an increase.
Continue Reading Bipartisan Budget Act Increases FCA Penalties

On April 6, 2015, the Sixth Circuit delivered a costly blow to the United States government to the tune of $657 million when it issued its opinion in United States v. United Technologies Corporation and remanded the case back to the district court to review the damages award, yet again.

This was the second time that the Sixth Circuit heard arguments deriving from the United States False Claims Act case against Pratt & Whitney (“Pratt”), now owned by United Technologies, for false statements the company made when competing against GE Aircraft for contracts to build F-15 and F-16 jet engines. In 1983, in an attempt to outbid GE Aircraft and make it hard for the government to issue a split-award contract, Pratt misstated its projected costs and certified that the company’s bid included its “best estimates and/or actual costs.” After uncovering Pratt’s overstated costs projections, the government filed both an administrative action against the company in the Armed Services Board of Contract Appeals (“ASBCA”) under the Truth in Negotiations Act and a lawsuit in district court alleging violations of the False Claims Act.

Continue Reading United Technologies is Saved from $657 million False Claims Act Verdict by the Sixth Circuit