The False Claims Act and it's Antivenom
Primer On The False Claims Act
Qui tam pro domino rege quam pro se ipso in hac parte sequitur
“he who brings an action for the king as well as himself”
Background
• Passed in 1863 during the Civil War to address fraud in
military procurement contracts
• Also known as “Lincoln’s Law”
• Has undergone substantial amendments by Congress in 1943,
1986, and 2009
• Allows for triple damages
“any person who—
(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false
record or statement material to a false or fraudulent claim;”
31 U.S.C § 3729
False Claims Act Is Expansive
• SAIC entered into a contract with NRC to help develop a
national standard for disposal of nuclear waste
• SAIC certified no OCIs and would alert NRC if an OCI arose
U.S. v. SAIC, DC Cir, 2010
The D.C. Circuit:
• Continued the trend of recognizing a FCA violation where the
contractual breach is not conditioned to payment of the
contractor
• The D.C. Circuit requires the breach to be “material” to the Govt
decision to pay
Sampling of Qui Tam Actions
1. Misrepresentation in proposal
2. Misrepresenting social economic status
3. Buying-in under false pretenses
4. GSA schedule most favored customer fraud
5. TINA violation
6. Use of unapproved source
7. Davis Bacon violation
8. Ineffective approved purchasing
system
9. Misallocation of indirect costs
10. Falsify QA records
Qui Tam Road Map
• Relator files complaint under seal
• Department of Justice investigates and decide whether to intervene
• DOJ often uses Civil Investigation Demands to investigate
• DOJ goal is to make decision in nine months
• If DOJ declines – files a notice of non-intervention
--DOJ can intervene at later time
--DOJ declination rate is approximately 75%
--Relator free to pursue law suit unless DOJ moves to dismiss
• If DOJ intervenes
--DOJ runs the litigation
--DOJ often files new complaint with additional FCA allegation
FCA: A “Profit Center”
The Whistleblower gets:
• 25% if the government intervenes
• 30% if the government does not intervene
Qui tam pro domino rege quam pro se ipso in hac parte sequitur
“he who brings an action for the king as well as himself”
Background
• Passed in 1863 during the Civil War to address fraud in
military procurement contracts
• Also known as “Lincoln’s Law”
• Has undergone substantial amendments by Congress in 1943,
1986, and 2009
• Allows for triple damages
“any person who—
(A) knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval;
(B) knowingly makes, uses, or causes to be made or used, a false
record or statement material to a false or fraudulent claim;”
31 U.S.C § 3729
False Claims Act Is Expansive
• SAIC entered into a contract with NRC to help develop a
national standard for disposal of nuclear waste
• SAIC certified no OCIs and would alert NRC if an OCI arose
U.S. v. SAIC, DC Cir, 2010
The D.C. Circuit:
• Continued the trend of recognizing a FCA violation where the
contractual breach is not conditioned to payment of the
contractor
• The D.C. Circuit requires the breach to be “material” to the Govt
decision to pay
Sampling of Qui Tam Actions
1. Misrepresentation in proposal
2. Misrepresenting social economic status
3. Buying-in under false pretenses
4. GSA schedule most favored customer fraud
5. TINA violation
6. Use of unapproved source
7. Davis Bacon violation
8. Ineffective approved purchasing
system
9. Misallocation of indirect costs
10. Falsify QA records
Qui Tam Road Map
• Relator files complaint under seal
• Department of Justice investigates and decide whether to intervene
• DOJ often uses Civil Investigation Demands to investigate
• DOJ goal is to make decision in nine months
• If DOJ declines – files a notice of non-intervention
--DOJ can intervene at later time
--DOJ declination rate is approximately 75%
--Relator free to pursue law suit unless DOJ moves to dismiss
• If DOJ intervenes
--DOJ runs the litigation
--DOJ often files new complaint with additional FCA allegation
FCA: A “Profit Center”
The Whistleblower gets:
• 25% if the government intervenes
• 30% if the government does not intervene