The Impact of Federal, State, and Local False Claims Acts on the Construction Industry

The Federal False Claims Act (FCA) is a law that helps fight fraud against the government. It was originally for defense contractors, but now it’s mostly used for medical and pharmaceutical claims. With more federal money going to construction projects, there may be more FCA cases against construction contractors. The law also allows private citizens to sue on behalf of the government and share in any money recovered. If someone thinks a contractor is reporting false information, they can sue them under the FCA. Most cases are settled because they’re expensive and could lead to being banned from government contracts. The False Claims Act (FCA) allows individuals to sue on behalf of the government if they believe someone has defrauded the government. If the government joins the suit, the person who brought the lawsuit (the relator) can get 15-25% of the money recovered. If the government does not join, the relator can get 30%. The FCA applies to businesses that sell to the government, including the construction industry. Several states, including Florida, have their own versions of the FCA.

The use of these lawsuits is expected to grow, especially in construction. The FCA has been mostly used for medical cases, but recent changes to the law and the potential for big payouts are likely to lead to more cases in construction. This article will talk about how the FCA applies to construction and how the changes might affect the industry. If an employee thinks their employer is cheating the government, they can file a lawsuit under the False Claims Act. The lawsuit is kept secret for at least 60 days so the employee can collect evidence. The government can then decide if they want to take over the lawsuit. If they do, the employee can still be part of the lawsuit and get a reward if the government wins. The employee can also get their legal fees paid. There are rules about when a private person can file a lawsuit, but if the person has original information about the fraud, they can still file a lawsuit. The False Claims Act is meant to encourage and protect people who report fraud. The False Claims Act (FCA) allows whistleblowers to file lawsuits against companies that defraud the government. The recent changes to the FCA have made it easier for lawsuits to be brought against construction contractors. The most significant change is that the false claim has to be “material,” meaning it has to have a natural tendency to influence the payment of money or property. This makes it harder for companies to defend themselves. The FCA also now does not require proof that the defendant intended for the false statement to result in the government paying a false claim. These changes have made it easier for whistleblowers to bring lawsuits against companies for fraud. This excerpt explains the definition of “knowingly” under the False Claims Act (FCA) and how it lowers the standard for bringing a lawsuit. It also mentions that subcontractors and suppliers can be held liable under the FCA. It explains that potential FCA claims can arise at every stage of a construction project, from the proposal stage to the payment requests during performance. It also states that each document submitted to the government regarding contract compliance can be considered a separate false claim. So, it’s important for contractors to be careful about the information they provide. FERA was a law meant to fix a court decision that made it harder for the government to prove someone made a false claim for payment. The law now makes it easier to hold people accountable for presenting false claims, even if the claim is for a project involving federal funds but paid by another entity. It also creates a new rule that makes contractors responsible for identifying and refunding any overpayments they receive from the government. This could lead to contractors being sued if they don’t refund the money. FERA (False Claims Act Amendments) has made it easier for the government to investigate and file lawsuits for fraud. The government now has more time to look into false claims and can add new evidence to a lawsuit, even if the time limit has passed. It is also easier for the government to get information through a subpoena-like request. These changes may also affect state laws in the future, so it’s important for lawyers to be aware of all the laws to protect their clients from lawsuits. Contractors who work on government-funded projects need to be aware of the False Claims Act (FCA), which allows people to sue if they believe the government has been overcharged. It’s important for contractors to have a system in place to prevent any false claims and to listen to employees who raise concerns about wrongdoing. They should also have a procedure for reporting potential false claims to the government. Some states and local governments have their own false claims laws, so contractors need to be aware of those too. The MDC ordinance requires contractors to certify their claims, similar to federal contracts. If they don’t submit certifications within 30 days, they lose their claim. The ordinance also holds anyone who knowingly presents a false claim to MDC liable. It includes provisions for debarring contractors and people who certified false claims for up to five years. It also allows for joint liability for fraudulent acts. The MDC ordinance is broader than the federal FCA, but still requires specific intent to defraud MDC. The MDC ordinance has similar provisions to the federal False Claims Act, but with a few differences. One big difference is that if the county gets involved in the case, the person who reported the fraud can only get 10% of the money recovered, but if the county doesn’t get involved, they can get 25%. The ordinance also has a rule that lets the county not take action if the person who reported the fraud can show that they didn’t know about the fraud and tried to fix it when they found out. This means it’s really important for companies to have good rules for making claims and to always follow those rules, because if the county says there’s a problem with a claim, the company only has five days to fix it. Construction attorneys and their clients need to be familiar with federal, state, and local false claims laws. These laws can be used by employees and the government to challenge a contractor’s payment for work. With increased enforcement by the government, clients should keep good records and address any concerns raised by employees about the claims. The False Claims Act requires whistleblowers to give the government a copy of their complaint and evidence. There are also local laws in Florida counties that relate to this. The Fraud Enforcement and Recovery Act of 2009 also has provisions related to False Claims Act cases. The False Claims Act prohibits certain types of lawsuits, such as ones brought by military members against other military members, actions against government officials based on known evidence, actions based on allegations already in a government lawsuit, and actions based on public disclosures unless the person bringing the action is the original source of the information or the Attorney General. The FCA also includes provisions for penalties and definitions of certain terms. This information is about a lawyer named Edward J. Kinberg who specializes in construction law. He used to work for the U.S. Army and is now in private practice. The column was written for a section of The Florida Bar.

Source: https://www.floridabar.org/the-florida-bar-journal/the-impact-of-federal-state-and-local-false-claims-acts-on-the-construction-industry/