Litigation & Disputes

The Government’s enforcement of contract provisions implementing the COVID-19 vaccine mandate with regard to federal contractors and subcontractors required by President Biden’s Executive Order 14042 (the EO) was preliminarily enjoined by a federal court in Kentucky in a case brought by the states of Kentucky, Ohio, and Tennessee (and two Ohio sheriffs). In his Opinion and Order of November 30, 2021 (the Order), Judge Gregory F. Van Tatenhove of the US District Court for the Eastern District of Kentucky (the Kentucky court) concluded, among other findings, that it was likely that the President exceeded his authority under laws delegating to the President management of federal procurement and requiring federal agencies to engage in “full and open competition” procurements. The court also raised concerns about whether the President’s actions violated the Tenth Amendment of the Constitution and the “nondelegation doctrine,” a constitutional principle recognized by the US Supreme Court that Congress does not have unlimited discretion in delegating to the President the power to make laws.
Continue Reading Federal Contractor Vaccine Mandate Enjoined in Kentucky, Ohio, and Tennessee: The Implications

In United States ex rel. Silver v. Omnicare, Inc., et al. (D.N.J. No. 11-cv-01326), a whistleblower relator consistently alleged that certain pharmaceutical service providers have engaged in an illegal kickback arrangement and defrauded the government by offering unreasonably low prices to nursing homes for Medicare Part A patients’ prescription drugs in exchange for the opportunity to provide the same drugs at much higher costs to the nursing homes’ Medicaid and Medicare Part D patients for reimbursement. In a recent Order, the federal district court in New Jersey revived previously dismissed claims and permitted the relator to file a new, and fourth, amended complaint that asserts a new theory of liability to buttress the core kickback scheme allegations. The new complaint asserts that prescription drug event (PDE) data and enrollee encounter data are “claims for payment” under the False Claims Act (FCA)—and that even accurate PDE data can be a “false claim” under the FCA in cases where a pharmacy is alleged to pay kickbacks to its customers.
Continue Reading How the Truth Is False: Accurate Prescription Drug Event Data Can Trigger False Claims Act Liability

Every government contractor hesitates and ponders whether information confidential and valuable to its business that is disclosed – either voluntarily or by compulsion – in a submission to a U.S. Government agency will be protected from release to a third party pursuant to that dreaded four-letter acronym: F-O-I-A. In a June 24, 2019, landmark decision, the U.S. Supreme Court, in Food Marketing Institute v. Argus Leader Media[1], has spoken for the first time on FOIA exemption covering such information – and the news is good for contractors seeking maximum protection of their valuable confidential IP and business information.
Continue Reading Good News for Federal Contractors – FOIA “Exemption 4” Protecting Confidential Information Gets Expansive Definition by U.S. Supreme Court in Food Marketing Institute v. Argus Leader Media

Section 8(a) of the Small Business Investment Act of 1958 authorizes the Small Business Administration (“SBA”) to enter into prime contracts with federal agencies and to subcontract the performance of the contract to qualified small businesses. As most are aware, the 8(a) program is designed to assist “socially and economically disadvantaged small business” concerns that are owned by one or more individuals who are from a socially and economically disadvantaged group and whose management and daily operations are controlled by such individuals. 15 U.S.C. § 637(a)(4)(A)-(B). Included in the definition of “socially and economically disadvantaged groups” are, among others, Indian tribes, Native Hawaiians, and Alaskan Natives, which allows each “maximum practical opportunities” to participate in the government contracting market. But in so doing, those companies must stomach the good with the bad, i.e., they must be prepared to (a) navigate the thicket of regulatory hurdles required to do business with the government and (b) combat potential allegations of fraud if there is a perception that one or more of those hurdles has not been cleared successfully.
Continue Reading Alutiiq False Claims Act Settlement Highlights Significant Government Contract Compliance Risks for Tribal, NHO, and ANC 8(a) Subsidiaries

As most contractors know all too well, doing business with the Government can be quite frustrating. One of the most – if not the most – prominent sources of that frustration is that the Government often operates with a callous disregard for the laws and regulations that are supposed to dictate the course of play under the contracts to which it is a party. With its December 28, 2017 decision in Flour Federal Solutions, LLC, ASBCA No. 61431-983, the Armed Services Board of Contract Appeals (“ASBCA” or “Board”) cast a searing spotlight on the Government’s dilatory conduct in the context of repeatedly failing to respond to a contractor’s claim. The facts are troubling:
Continue Reading The ASBCA Thunders to the Government: Do Your Job!

Contractor past performance evaluations are important factors in source selection decisions under Parts 8 and 15 of the Federal Acquisition Regulation (“FAR”), and they can easily make or break a contractor’s federal customer base. Especially vulnerable are contractors competing in Lowest Price Technically Acceptable (“LPTA”) procurements, where a bad past performance rating can make contractors ineligible due to an “unacceptable” technical rating even though they may offer the lowest price. The submission by Government contracting officials of a contractor’s performance evaluation to the Contractor Performance Assessment Reporting System (“CPARS”) is required in most instances; however, the contractor’s remedies for correcting poor performance evaluations due to mistakes and material omissions by the evaluator are limited in both time and scope. And as the DoD’s Inspector General (“IG”) has repeatedly pointed out, most recently in its May 9, 2017 report, Summary of Audits on Assessing Contractor Performance (noting a large percentage of DoD performance assessment reports are late and not prepared correctly and accurately), mistakes often happen. Contractors looking to sustain their business in the federal marketplace need to be properly armed with the weapons available to challenge poor performance evaluations when the agency gets it wrong.
Continue Reading Sparring with CPARS: Some Tips on Avoiding and Curing Bad Past Performance Evaluations That Can Haunt and Jeopardize a Government Contractor’s Business for Years

Colleges and universities receive billions of dollars in federal funds, whether through research grants or student financial aid, or even by billing Medicare or Medicaid for services rendered at academic medical centers. As a result, institutions of higher education must be vigilant to ensure that their receipt of federal funding does not implicate the broad scope of the civil False Claims Act (FCA), a federal statute that seeks to combat fraud against the government. Those found liable of violating the FCA by submitting false claims to the government face treble damages and penalties ranging from $10,781 to $21,563 per violation. In recent years, there has been an unprecedented and steady rise in the number and types of cases brought under the FCA. In 2016, the U.S. Department of Justice (DOJ) recovered more than $4.7 billion in settlements and judgments from civil cases involving fraud against the government under the FCA, a $1.2 billion increase over the $3.5 billion recouped last year in 2015.
Continue Reading Universities Are Prime Targets for False Claims Act Liability

The late, great Yogi Berra once said that “Baseball is 90 percent mental. The other half is physical.” Sometimes it seems as if Yogi’s logic is equally applicable to the claims process in the world of Government contracting, where 90 percent of the early battle is following the correct claim initiation procedures prescribed by the Contract Disputes Act (“CDA”), 41 U.S.C. §§ 7101-7109.
Continue Reading Government Contractors Can Learn From Yogi Berra: Failure to Follow Correct Claim Submission Procedures Results in Jurisdictional Doom

Forrest Gump’s mama was a brilliant woman. As anyone who watched the 1994 Academy Award-winning classic can confirm, Mrs. Gump’s advice to her son provided an indispensable well of wisdom from which Forrest often drew to navigate life’s many adversities. Perhaps the most famous of Mrs. Gump’s quotes equated the unpredictability of life with the somewhat surprising discoveries one can make after removing the lid from a box of chocolates. As it turns out, contractors can learn a lot from Mrs. Gump.
Continue Reading AMX Case Shows Contractors Can Learn From ‘Forrest Gump’