The Impact of Escobar and the Procurement Collusion Strike Force on Procurement-Related False Claims Act Settlements

• Published in: The Procurement Lawyer Vol. 57; no. 2; pp. 3 - 26
• Main Authors: Knowles, Samuel B, Stern, Dawn E, Daley, Thomas E
• Format: Trade Publication Article
• Language: English
• Published: Chicago American Bar Association 01.04.2022
• Subjects: Antitrust; Breach of contract; Certification; Contractors; Enforcement; Federal court decisions; Fines & penalties; Fraud; Government purchasing; Jurisprudence; Liability; Materiality; Noncompliance; Violations; United States > US
• ISSN: 1079-073X; 2163-0267

The PCSF is an interagency partnership consisting of prosecutors from U.S. Attorney's Offices and the Department of Justice Antitrust Division, as well as investigators from the Federal Bureau of Investigation and a broad range of federal agencies. "11 The Supreme Court noted that the U.S. Court of Appeals for the Seventh Circuit "had rejected this theory, reasoning that only express (or affirmative) falsehoods can render a claim 'false or fraudulent,'" while others "have accepted the [implied certification] theory" but differed in its application.12 The Supreme Court determined, as an initial matter, that "the implied false certification theory can, at least in some circumstances, provide a basis for liability. "13 According to the Supreme Court, the implied certification theory may serve as a basis for liability when at least two conditions are satisfied: "first, the claim does not merely request payment, but also makes specific representations about the goods or services provided; and second, the defendant's failure to disclose noncompliance with material statutory, regulatory, or contractual requirements makes those representations misleading half-truths. "16 The Supreme Court then addressed whether, under an implied certification theory, a party should be liable only if the party fails to disclose a contractual, statutory, or regulatory violation that the government expressly designated as a condition of payment.17 The Supreme Court stated that the FCA "does not impose this limit on liability" but that "not every undisclosed violation of an express condition of payment automatically triggers liability.