Government Contracts False Claims Act Defense

Experience Highlights

• Fluor Corporation in persuading DOJ to decline intervention in 2018 after sprawling, multi-year protracted investigation, in a qui tam action brought by multiple relators relating to management of hundreds of millions of dollars-worth of materials on a contingency contract performed in Afghanistan.

• KBR in long-running FCA lawsuit involving KBR’s provision of essential wartime support to the U.S. Army during the early days of the war in Iraq. Won partial summary judgment in 2021, and in 2022, reached a favorable settlement with the U.S. at a fraction of DOJ’s initial damages claim with no admission of liability.

• Multinational defense contractor in persuading DOJ to drop its FCA investigation that originated from a DCAA audit. After presenting evidence to DOJ demonstrating that allegations of non-disclosure of cost or pricing data were wrong, DOJ dropped investigation in 2022. 

• Fluor Corporation in winning summary judgment in 2022 on relator's FCA retaliation claim alleging that relator was included in reduction in force from Afghanistan because he made an internal report of allegedly falsified inventory records, which was affirmed on appeal. Actively litigating relator's substantive FCA in a separate action.

• KBR in qui tam action in which, after dismissal by trial court and reversal by circuit court, the Supreme Court ruled 9-0 in favor of KBR that Wartime Suspension of Limitations Act does not suspend the statute of limitations for civil fraud actions, including the FCA. The case was dismissed on remand and dismissal was affirmed on appeal in 2018.

• KBR in obtaining unilateral and voluntary dismissal by DOJ of FCA litigation involving a Request for Equitable Adjustment, without any settlement or making any concessions, after an evidentiary hearing in a parallel proceeding before the Armed Services Board of Contract Appeals.

• KBR in winning two landmark mandamus rulings in DC Circuit relating to privilege governing internal investigations in connection with FCA case. We then won summary judgment on all FCA counts, which was affirmed on appeal in 2017.

• Multinational defense contractor in obtaining favorable settlement in 2018 in this DOJ-initiated FCA investigation involving allegations of fraudulent inducement in the award by the military of a software development program. Persuaded DOJ before complaint was filed that it would have significant issues proving materiality under Escobar, resulting in a settlement of less than $2.5 million where potential damages could have been more than $100 million trebled.

• Major defense non-profit organization in a FCA investigation, including DCIS and CID subpoenas, arising out of alleged unallowable costs charged to government contracts (plus substantial penalties alleged for expressly unallowable costs) in a Defense Contract Audit Agency audit report. Reached a settlement with DOJ in 2021 on a non-FCA basis for an amount that was a fraction of the unallowable costs alleged.

• Multinational defense contractor in obtaining favorable settlement in 2017 in this DOJ-initiated FCA investigation. After winning a significant privilege dispute and motion to compel against the government, the case settled for less than the cost of litigation where the government originally sought more than $400 million.