XL EagleFalse Claims Act (False Claims Act (FCA))
False Claims Act stands for False Claims Act (FCA). The False Claims Act is the government's main tool against fraud in federal contracts. It makes a person or company liable for knowingly submitting a false claim for payment, or making a false record or statement to get paid. 'Knowingly' includes deliberate ignorance and reckless disregard, not just intent.
Liability can include up to three times the government's damages plus per-claim penalties that are adjusted for inflation. Private whistleblowers, called relators, can file 'qui tam' suits on the government's behalf and may receive a share of any recovery.
Why it matters to a small contractor
False claims are not only fake invoices. False certifications, like claiming small business status you do not have, saying a product is TAA compliant when it is not, or underpaying required wages while certifying you paid them, can all create FCA risk. When in doubt, ask before you certify.
Example
A supplier certifies that gloves meet the Berry Amendment while knowing the fabric is imported. An employee reports it, and the company faces a False Claims Act investigation over the invoices tied to that false certification.
False Claims Act: common questions
What is a qui tam lawsuit?
It is a lawsuit filed by a private person on behalf of the government under the False Claims Act. The relator may receive a share of what the government recovers.
Can an honest mistake violate the False Claims Act?
An honest mistake is generally not enough. Liability requires knowing conduct, which includes reckless disregard of the truth.
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