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Project In(Site): Legal Developments Impacting Construction & Government Contract Industries

06/08/2016

Welcome to the second issue of Project In(Site), Seyfarth’s Construction and Government Contracts practice groups’ publication focusing on decisions or other items of interest for construction and government contract solutions. Each summary below is followed by key practice takeaways.
 
Supreme Court Expected to Clarify the Scope of the False Claims Act
 
 
“I meant what I said, and I said what I meant.”1  Or maybe not.  Industry is eagerly awaiting the Supreme Court’s decision in Escobar.2  The Court is expected to clarify whether a person can be held liable, not for something that the person said, but for what the person implied.  Or more accurately, for what it is assumed that the person implied.
 
The False Claims Act (“Act”) was enacted in 1863 to attack fraud in the government’s procurement of supplies and services for use in the Civil War.  The Act prohibits persons from knowingly making a false claim for monies to the government, either directly or indirectly.3  A “claim” can include any request for monies.  The most typical claim is an invoice - either for payment due under a contract or for reimbursement of services rendered (e.g. Medicare reimbursements).  “Indirectly” refers to a situation where one makes a false claim to a third party - for example, a subcontractor’s invoice to a prime contractor - knowing that the third party will use that claim to make further claim against the Government.