Government Contracts

Subscribe to Government Contracts via RSS

Last week, the District Court for the Eastern District of California denied the defendant’s motion for summary judgment of a False Claims Act (FCA) count against Aerojet Rocketdyne (Aerojet) for allegedly fraudulently inducing the government to enter into federal contracts when the company knew it was not compliant with cybersecurity requirements.
Continue Reading Government Contractors Face False Claims Act Liability for Cybersecurity Non-Compliance

There is a new weapon in the Department of Justice’s (DOJ’s) already powerful False Claims Act (FCA) arsenal.  In October 2021, the DOJ announced a new Civil Cyber-Fraud Initiative, under which it will pursue FCA liability against government contractors in the cybersecurity space.  According to the announcement from Deputy Attorney General Lisa O. Monaco, the initiative seeks to “hold accountable entities or individuals that put U.S. information or systems at risk by knowingly providing deficient cybersecurity products or services, knowingly misrepresenting their cybersecurity protocols, or knowingly violating obligations to monitor and report cybersecurity incidents and breaches.”

Overview of the Civil Cyber-Fraud Initiative

The Civil Cyber-Fraud Initiative follows several significant cyberattacks, which are only becoming more prevalent. The new initiative is the first formal step DOJ has taken in combatting them by focusing on the preventative cybersecurity efforts of government contractors.Continue Reading DOJ Expands False Claims Act Reach into Cybersecurity

In a February 4, 2016, decision, United States ex rel. Wall v. Circle C. Construction, LLC, the Sixth Circuit summarily rejected the government’s assertion that the measure of damages in a False Claims Act (FCA) suit involving a violation of prevailing wage rate requirements was the total amount paid for the work.  The Sixth…

The Ninth Circuit affirmed the district court’s dismissal of a relator who pleaded guilty to a felony that involved the same fraudulent conduct that gave rise to the relator’s qui tam suit in U.S. ex rel. Schroeder v. CH2M Hill. The FCA’s § 3730(d)(3) requires dismissal of a relator from a qui tam lawsuit and precludes the relator from any recovery in the lawsuit, “[i]f the relator has been convicted of criminal conduct arising from his or her role in the violation of section 3729.” In Schroeder, the Ninth Circuit concluded that this provision applied even to minor participants in the underlying alleged misconduct, who neither planned nor initiated the fraudulent scheme.

The relator, who was employed by the defendant government contractor, was involved in an underlying fraudulent scheme to bill the Department of Energy (DOE) by submitting false time cards to DOE for hourly work. After his interview by investigators, the relator pleaded guilty to a felony count of conspiracy to commit fraud. After his interview, but before pleading guilty, the relator filed suit under the FCA against his employer concerning the DOE fraud scheme. The United States intervened and moved to dismiss the relator from the lawsuit under § 3730(d)(3) as a result of his felony conviction.Continue Reading Ninth Circuit Takes Hard Line against Relators Involved in FCA Wrongdoing

The D.C. Circuit reversed the district court’s dismissal of a serial relator’s qui tam lawsuit under the FCA’s first-to-file bar in U.S. ex rel. Heath v. AT&T, Inc., finding that the relator’s two qui tam lawsuits targeted factually distinct types of frauds. The D.C. Circuit further determined that the relator’s qui tam lawsuit satisfied the pleading requirements of Rule 9(b).
Continue Reading D.C. Circuit Reverses District Court Dismissal of Qui Tam Lawsuit

In a long-awaited ruling, the Supreme Court held that the Wartime Suspension Limitations Act (WSLA) does not toll the statute of limitations in civil FCA actions, as the WSLA applies only to criminal actions.  After lying dormant for more than 40 years, the WSLA had threatened to upend the FCA’s limitations period and expose defendants to open-ended and extensive liability for otherwise stale FCA claims.

Amended in 2008, the WSLA provides that the statute of limitations applicable to any offense involving fraud against the United States during a time of war or when Congress has enacted a specific authorization for the use of military force is suspended until five years after the termination of hostilities.  In a number of recent cases, relators had begun relying on the WSLA as a means to avoid dismissal of claims brought outside of the FCA’s limitations period.Continue Reading Supreme Court Limits WSLA to Criminal Offenses

Employee severance packages and settlement agreements often include a broad waiver of any claims, known or an unknown, which an employee may have against the company.  Although such broad pre-filing releases are highly recommended, companies doing business with the government should be cautioned that these waivers do not always protect against False Claims Act (FCA) litigation.  A line of federal cases has established that these so-called “pre-filing releases” are sometimes unenforceable against suits filed by whistleblowers, or qui tam actions, for public policy reasons.
Continue Reading Enforceability of Employee Releases on Qui Tam Actions

Is late package delivery considered an FCA liability for government contractors? Bass, Berry & Sims attorneys analyzed the recent settlement between United Parcel Service Inc.’s (UPS) and the Department of Justice (DOJ) resolving allegations that UPS submitted false claims to the federal government related to the timeliness of package delivery. This case shows the range…

From the Bass, Berry & Sims Blog Network
From the Bass, Berry & Sims Blog Network

Thought Leadership by our Attorneys.