The Department of Justice (DOJ) recently announced that False Claims Act (FCA) settlements and judgments exceeded $6.8 billion in fiscal year 2025. This massive haul is the largest annual recovery in the statute’s storied history. Although health care enforcement continues to account for the majority of recoveries, DOJ’s annual statistics confirm that procurement fraud, cybersecurity compliance, pandemic-program enforcement, and trade-related fraud remain core enforcement priorities that government contractors should not ignore. The FY 2025 numbers reinforce a familiar message: FCA enforcement remains one of DOJ’s most powerful tools for policing federal spending, and contractors should expect continued scrutiny of their certifications, representations, and contract compliance systems.Continue Reading Now That’s a Lot of Money: DOJ’s Record-Setting FCA Year Reflects Intensifying Enforcement Pressure on Government Contractors
Through the Looking Glass: Shifting DEI Standards Expose Contractors to False Claims Act Risk
“Beware the Jabberwock, my son! The jaws that bite! The claws that catch!”
– Lewis Carroll: “Jabberwocky,” Through the Looking-Glass, and What Alice Found There (1872)
There is a growing sense of confusion and unease among many federal contractors and grant recipients in these early days of the second Trump administration. In a time when some agencies face dislocation and downsizing (or, as with USAID, effective disbandment), contractors may feel like Alice stepping through the Looking Glass into a world strangely inverted from the one they knew. This shift is especially evident in the administration’s rejection of seemingly all diversity, equity, and inclusion (DEI) policies—long used to prevent discrimination, comply with civil rights laws, and foster inclusive environments in the American workforce.Continue Reading Through the Looking Glass: Shifting DEI Standards Expose Contractors to False Claims Act Risk
Whisper Through the Screams: DOJ Commits to False Claims Act Enforcement in 2025
Amid the chaos of the past few weeks—sweeping executive orders, relentless cost-cutting, and an air of uncertainty that lingers like smoke after a fire—federal contractors have been left reeling, straining to hear what comes next through the deafening noise. In this storm, predicting the future is as futile as fortune-telling. And yet beneath the shouts of change and upheaval, one truth remains, a whisper through the screams—some things, especially those that serve the government’s interests, are not going anywhere.Continue Reading Whisper Through the Screams: DOJ Commits to False Claims Act Enforcement in 2025
Wisconsin Bell: Testing the Elasticity of False Claims Act’s Scope
Just how broad is the scope of the False Claims Act (FCA)? That is the basic question posed in Wisconsin Bell, Inc. v. U.S. ex rel. Heath, No. 23-1127. Put more directly, the case addresses whether reimbursement requests under the Schools and Libraries Universal Service Support program—better known as the E-Rate program—are actionable “claims” exposed to liability under the FCA. But when the US Supreme Court hears oral argument next month, the justices will grapple with broader questions with implications far beyond this case: (1) when does the government “provide” money in any transaction or program so that FCA liability attaches; (2) when is an independent government-sponsored enterprise (e.g., Fannie Mae/Freddie Mac) acting as an “agent” of the United States for FCA purposes; and (3) to what extent do those who deal with private entities established or chartered pursuant to federal law need to watch this case to determine their potential exposure under the FCA and its panoply of enforcement mechanisms?Continue Reading Wisconsin Bell: Testing the Elasticity of False Claims Act’s Scope
The False Claims Act’s Fuzzy Scienter Element Brought into Sharp Focus
Parties litigating False Claims Act (FCA) cases have long struggled with a thorny question around the essential element of scienter (the defendant’s intent, or state of mind): What/how much does a contractor need to know when submitting an invoice for payment for the related claim to be considered knowingly false when made? When that question arises in FCA litigation, a court’s determination of that essential element of scienter/knowledge often pivots on what the judge believes matters more:
(A) The defendant’s subjective belief at the time a claim is made; or
(B) An objective textual reading of what a person may have known or believed when a claim is made.Continue Reading The False Claims Act’s Fuzzy Scienter Element Brought into Sharp Focus
No Harm, No Fraud: The Supreme Court Narrows the Application of the Wire Fraud Statute and Unanimously Overrules the “Right to Control” Theory
Most experienced contractors have a healthy fear of the various types of fraud claims: False Claims Act, federal and state wire and mail fraud, common law fraud, etc. They know that enforcement authorities are always looking for ways to swing the hammer against a contractor they suspect is fleecing the government. Fraud claims arise when a victim (sometimes the government) contends that the defendant lied about the goods or services offered in order to induce the victim to voluntarily transfer property to the defendant in an exchange. Where the victim parts with much for nothing in return, the fraud analysis is easy—the defendant’s intent to wrongfully steal property or to inflict a pecuniary loss is obvious. But in cases where the victim receives from the defendant goods or services of real value, whether the defendant intended to harm the victim or deprive them of their property becomes a more difficult question.Continue Reading No Harm, No Fraud: The Supreme Court Narrows the Application of the Wire Fraud Statute and Unanimously Overrules the “Right to Control” Theory
What Every Federal Contractor Should Know About the FTC’s Proposed Rule to Void Noncompete Agreements Nationwide—and What to Do About It
One of the most dynamic areas of the law that is of keen concern to federal contractors is the issue of employee noncompetition agreements (NCAs). Historically, NCAs were a common and valuable tool employers used to protect their businesses from unfair competition or misuse of confidential company information; NCAs prevented former employees from leveraging their on-the-job training and introductions to key customers in order to poach those same customers if the employees moved to a competitor or launched a rival business. But in recent years, a number of states have increasingly limited the enforceability of NCAs in employment and separation agreements. Last year, the District of Columbia joined California, North Dakota, and Oklahoma in essentially banning outright the use of NCAs in most circumstances. There has also been a gradual trend in many other states (e.g., Virginia, Maryland, Nevada) to limit or void noncompetes for low-wage or hourly workers. Hawaii passed a law in 2015 that specifically prohibits including a noncompete clause in the employment contract of an employee of a “technology business,” defined as any business that derives most of its gross income from the sale or license of products or services resulting from its software and/or information technology development. Everywhere you look, NCAs are increasingly under threat in most jurisdictions across the country.Continue Reading What Every Federal Contractor Should Know About the FTC’s Proposed Rule to Void Noncompete Agreements Nationwide—and What to Do About It
Knowing IS the Battle: Supreme Court to Address the FCA’s Scienter Standard
Scenario 1: A pharmacy chain hires a value consultant to review its Medicare and Medicaid billing practices for ways to optimize the coding of drug reimbursements to maximize profits. Drugs that had historically been charged for government reimbursement at $1/pill as the “usual and customary price” are now getting coded for reimbursement at $3/pill—a 200% markup that represents a pure profit windfall to the pharmacy chain. Is this a violation of the False Claims Act (FCA)?
Scenario 2: A construction company that has years of experience in federal procurement contracting had never charged the government for reimbursement of several cost items, because the company’s previous CFO did not feel such reimbursement would meet the “reasonableness” requirements of FAR Part 31 (e.g., FAR 31.201-2(a)(1) and 31.201-3). But the company’s new CFO, holding a different interpretation of the reasonableness standards and Cost Accounting Standards (CAS), instructs his program leads to start charging those items for reimbursement in all new and existing contracts. Is this a violation of the FCA?Continue Reading Knowing IS the Battle: Supreme Court to Address the FCA’s Scienter Standard
DOJ’s Procurement Collusion Strike Force: Widening Its Stride on Its Third Anniversary
The U.S. Department of Justice (DOJ) Procurement Collusion Strike Force (PCSF, or Strike Force) celebrates its third anniversary this month. Formed in November 2019 as an interagency partnership consisting of DOJ’s antitrust prosecutors, lawyers in 13 U.S. attorneys’ offices, and investigators from the FBI and federal Offices of Inspector General, the Department of Defense, the General Services Administration, and the U.S. Postal Service, the Strike Force leverages joint resources to investigate public procurement crimes, employ complementary enforcement and prosecution strategies, eliminate anticompetitive collusion and fraud, and promote the integrity of government procurement. Employing education and state-level liaising, the Strike Force has been remarkably omnipresent and successful in that short time, despite numerous pandemic-related interruptions/delays in the courts. The pace of the Strike Force’s enforcement activity has quickened dramatically in 2022—and shows no signs of slowing in 2023.
Continue Reading DOJ’s Procurement Collusion Strike Force: Widening Its Stride on Its Third Anniversary
Prevention v. Cure: Supply Chain Hygiene Is the Key to Defending Enforcement
As COVID-19 antibodies begin flooding the immune systems of most Americans, it is important to remember the important role that hygiene has played over the past fifteen months. For many, the risks and dangers of the pandemic were kept at bay by hand washing, masking, and sanitizing after every new touch. That same kind of attention to hygiene is something federal contractors should retain as they are permitted to reenter a world filled with supply chain enforcement risk.
Continue Reading Prevention v. Cure: Supply Chain Hygiene Is the Key to Defending Enforcement