The Port of Anchorage Intermodal Expansion Project was envisioned to be a $1 billion project that would replace outdated infrastructure at the Port of Alaska, but defective management, design, and construction derailed the Project. Seyfarth was tasked with prosecuting claims and recovering money spent by the Department of Transportation Maritime Administration (MARAD) for the
Adam Lasky, co-chair of Seyfarth’s Government Contracts practice, and Scott Hecker, senior counsel in Seyfarth’s Labor & Employment practice, are presenting “Hot Labor & Employment Issues in Federal Contracting” at the Alliance Northwest Conference on March 10, 2022. The program will cover hot issues and recent regulatory developments on Service Contract Act, Davis-Bacon Act, Project
Teddie Arnold and Stephanie Magnell spoke about government contractors protecting themselves from government fraud arguments in the February 25th Federal Publications Seminars Podcast “Avoiding Fraud in Federal Contract Claims.”
When contractors file claims against the government, they should make sure they are on solid ground to protect against government claims of fraud. Listen to the
The Fourth Circuit, in United States ex rel. Sheldon v. Allergan Sales, LLC, No. 20-2330, 2022 WL 211172 (4th Cir. Jan. 25, 2022) recently upheld the dismissal of False Claims Act (“FCA”) lawsuit brought by a quit tam relator (“Relator”) against his employer, Forest Laboratories, LLC (“Forest”) alleging that Forest engaged in a fraudulent price reporting scheme under the Medicaid Drug Rebate Statute (“Rebate Statute”).[1]
Notably, the Fourth Circuit adopted the US Supreme Court’s decision in Safeco Ins. Co. of Am. v. Burr, 551 U.S. 47 (2007) in holding that the scienter element of the FCA is subject to an “objective reasonableness” standard, where a defendant can defeat FCA liability by establishing that its interpretation of the applicable statute or regulation was objectively reasonable and that no authoritative guidance from a court or agency could have “warned defendant away” from that interpretation. Just last year, the Seventh Circuit adopted this standard in U.S. ex rel. Schutte v. SuperValu Inc., joining the Third, Eighth, Ninth, and DC Circuits in holding the same.
At issue in Sheldon was the reasonableness of Forest’s interpretation of the Rebate Statute in determining how it calculated certain discounts given to separate customers for purpose of reporting its “best price” to the government. The District Court dismissed the complaint on the basis that Forest’s reading of the Rebate Statute was “objectively reasonable,” there was no authoritative guidance to the contrary, and thus Forest did not act “knowingly” under the FCA. The Fourth Circuit affirmed.[2]
Continue Reading Fourth Circuit Adopts Objective Reasonableness Standard in Determining Scienter Element of the False Claims Act
Seyfarth partner Teddie Arnold is moderating the “Enhancing Small Business Ethics and Compliance Efforts” panel for the Defense Industry Initiative’s (DII) first quarter webinar on Thursday, March 24 at 1:00 p.m. Eastern. The program will include a discussion of ethics and compliance risks and opportunities for small and mid-sized businesses, with perspectives from industry, experts,
In a recent decision, the Court of Appeals for the Federal Circuit held that FAR 52.212-4(l), the Termination for Convenience clause used in commercial items contracts, had no effect in a services contract—even though the services contract explicitly incorporated the clause. The case could have significant implications not just for services contracts that borrow commercial-items clauses, but also for contractors evaluating whether new clauses added into their contract (like clauses requiring COVID-19 vaccines) are operative.
Continue Reading Federal Circuit Holds Termination for Convenience Clause Inoperative in Services Contract
After reporting its lowest annual recovery from False Claim Act (“FCA”) cases in Fiscal Year (FY) 2020, the Department of Justice (“DOJ”) has reportedly bounced back. On February 1, 2021, DOJ released detailed statistics regarding FCA recoveries during FY 2021, during which DOJ reportedly obtained more than $5.6 billion in civil FCA settlements and judgments, of which $5 billion related to matters involving the health care industry. This follows what had been a significant decline from the high water mark in 2014 when DOJ recovered a record $5.69 billion, after which the number of dollars recovered had generally trended downward—2015 ($3.5 billion), 2016 ($4.93 billion), 2017 ($3.47 billion), 2018 ($2.9 billion), 2019 ($3 billion), and 2020 ($2.2 billion). DOJ reported recoveries in the form of settlements and judgments across various sectors including health care fraud, procurement fraud, COVID-related fraud, as well as a slew of other fraud including those involving oil and natural gas exploration, the FCC’s E-Rate program, federal funding for tutoring services, and FHA loan underwriting deficiencies. In addition, DOJ touted its cybersecurity initiatives, as well as its continued commitment to hold individuals accountable under the FCA.
Continue Reading DOJ Reports False Claims Act Recoveries for Fiscal Year 2021
While most federal contractors are eminently familiar with the False Claims Act (“FCA”)—government’s most potent weapons for prosecuting false claims—the anti-fraud provision of the Contract Disputes Act (“CDA”) does not receive nearly as much attention in the headlines. CDA anti-fraud cases are rarer than FCA cases for a couple reasons. First, the government’s remedies under the CDA pale in comparison to the robust deterrents available under the FCA, which include five-figure fines (between $11,000 and $22,000 per claim) and potential treble damages.[1] Second, the government is limited to enforcing FCA fraud claims in the federal court system, which complicates matters when the government seeks to assert FCA counterclaims as leverage in cases pending in the Civilian Board of Contract Appeals or the Armed Services Board of Contract Appeals.[2] Thus, case law addressing CDA anti-fraud claims is sparse; indeed the US Court of Appeals for the Federal Circuit has never issued a published opinion discussing such claims. Last month, however, emerged an anti-fraud decision in the US Court of Federal Claims (“COFC”) that may eventually find itself worthy of higher-level scrutiny.
Continue Reading US Court of Federal Claims Clarifies the Statute of Limitations for CDA Anti-Fraud Claims
Executive Order 14005Not even one week into the Biden Administration’s tenure, Buy American rules are yet again taking center stage as a fundamental policy objective. On January 25, 2021, President Biden issued Executive Order 14005 entitled “Ensuring the Future is Made in All of America by All of America’s Workers,” which sets forth the new Administration’s policy of utilizing the federal procurement process to maximize the use of goods, products, and materials that are US-origin. Executive Order 14005 takes aim at overhauling “Made in America Laws,” which it defines broadly as inclusive of all statutes, regulations, rules, and Executive Orders relating to federal financial assistance awards or federal procurement—known interchangeably as Buy America or Buy American rules—which provide a preference for purchase of domestic goods and materials that are US-origin. But unlike Executive Order 13788 issued by the Trump Administration making changes to Buy America rules, President Biden’s Executive Order 14005 does not make any immediate changes to those rules. Rather, it calls for a review of existing laws and implementing rules. That review, however, and what proposed changes in existing laws comes out of that review, could be significant.
Continue Reading Biden Administration Issues Executive Order 14005 Aimed at Strengthening Made in America Laws
Seyfarth partner James Newland co-authored “Preparing and Presenting Loss of Labor Productivity Claims: Analysis of the Methodologies with Two Exemplars”, published in the Summer 2020 edition of the ABA’s The Construction Lawyer.
It is beyond doubt that losses of labor productivity exist in the construction industry. When a party seeks to recover