Principal Deputy Assistant Attorney General Stuart Delery recently announced the Department of Justice’s (DOJ’s) record year for False Claims Act (FCA) civil recoveries. What was the FY 2012 amount? Nearly $5 billion.
A 70 year old man was recently sentenced to over seven years in federal prison for falsely claiming to be a service-disabled veteran and war hero in order to obtain nearly $6.8 million dollars in federal contracts set aside under the Service-Disabled Veteran-Owned Small Business (SDVOB) Program. This harsh sentence is yet another example of the Federal Government’s increased focus on individuals and companies that misrepresent their size and/or socioeconomic status.
In United States v. Rabinowitz, No. 11-CR-230, Jerome Rabinowitz was indicted in the Southern District of Ohio, Eastern Division on multiple counts of mail fraud, wire fraud, money laundering, and false statements. Mr. Rabinowitz was the owner of J&W Technologies, LLC (“J&W”), a New York corporation and DOD contractor that sold and supplied parts to the DOD. The items at issue included a variety of electronic parts, including semiconductors, microcircuits, and transistors utilized in the Navy Nuclear Reactors Program, military aircraft, and strategic weapons systems on several submarines, all of which the indictment alleged to be “critical application items.” The case demonstrates the importance of strict adherence to the requirements of the Qualified Products List (“QPL”) and the serious consequences for failing to meet those requirements.
As detailed in a recent report issued by the Government Accountability Office (GAO), federal agency efforts to address fraud, waste, and abuse in small business research and development contracts are continuing to develop into more robust programs that remain agency-specific but will increasingly reflect a common set of strategies.
As “talks” among the White House and Congressional leaders stumble along here in Washington, D.C., contractors all along the ideological spectrum hope that reason will prevail and a deal will be struck so the “fiscal cliff” and sequestration can be avoided. However, as demonstrated by the wrangling that resulted in the Budget Control Act of 2011 (and our current predicament), rational and timely solutions to the nation’s problems are not always achievable. Given this reality, prudent federal contractors need to take steps now to prepare for the worst.
On November 14, 2012 the Criminal Division of the Department of Justice and the Enforcement Division of the Securities and Exchange Commission issued a long promised “Resource Guide” on the U.S. Foreign Corrupt Practice Act (“FCPA”). As previously reported here, DOJ announced this guide was coming a year ago – and it is worth the wait. The Guide provides a comprehensive survey of the anti-bribery and accounting provisions of the FCPA and how allegations of violation of the Act are evaluated, investigated and enforced. It also contains brief summaries of other U.S. laws that may be implicated when companies make payments to foreign government officials. While the Guide does not provide much in the way of new information about how the SEC and DOJ resolve an FCPA action, it is quite useful to have the policies of both agencies summarized in a single document.
In addition to causing the impacts on winning awards and maintaining contract scope discussed in our previous article, sequestration promises to make contract performance substantially more difficult for government contractors. This doesn’t mean that sequestration will add to the requirements with which contractors have to comply. It just means that sequestration will give contractors more reason than ever to comply with all contract requirements.
In a recent bid protest challenging the Army’s award of an 8(a) contract to an allegedly ineligible small business, Reema Consulting Services, Inc. v. United States, No. 12-402C (Fed. Cl. Nov. 26, 2012), the Court of Federal Claims stated that:
Like the Roman God Janus, plaintiff concurrently looks backward and forward in requesting relief.
Unfortunately for the Protestor, channeling the ancient gods brought neither form of relief.
Federal government contractors with at least fifty employees and government contracts valued at more than $50,000 are required to have affirmative action plans “to employ and advance in employment qualified special disabled veterans, veterans of the Vietnam era, recently separated veterans, and other protected veterans at all levels of employment, including the executive level.” 41 C.F.R. § 60-250.43. Compliance with veterans affirmative action plans can be time consuming and, in some circumstances, burdensome. However, for a limited time, the Government may compensate businesses for hiring veterans and meeting their veterans hiring targets by way of tax credits, all thanks to the VOW to Hire Heroes Act of 2011, which specially expanded the Work Opportunity Tax Credit.
On November 27, 2012, President Obama signed S. 743, the "Whistleblower Protection Enhancement Act of 2012." The Act is a significant enhancement to existing whistleblower protections for federal employees. The Act passed both houses of Congress with unanimous support.