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An international counterpart to the Defense Industry Initiative, the International Forum on Business and Ethical Conduct is the only organization dedicated to increasing awareness and sharing best practices in ethics and anti-corruption issues for the global defense industry. With a…
Damages for Misrepresenting Subcontractors’ Size and Status Unrelated to Value Received by Government Through Contractor’s Performance; United States District Court for the Eastern District of Washington No. 2:10-CV-05051-SMJ, United States ex rel Salina Savage, Savage Logistics LLC v Washington Closure Hanford LLC, et al
The District Court for the Eastern District of Washington denied Washington Closure Hanford LLC’s attempt to limit the permissible scope of the government’s damages in relation to allegations the contractor misrepresented the size and socioeconomic status of some of its subcontractors,…
The U.S. District Court for the District of Columbia has dismissed a False Claims Act case filed against Halliburton subsidiary Kellogg, Brown & Root. In United States ex rel. Barko v. Halliburton Co., et al., No. 05-cv-1276, the plaintiff alleged KBR accepted kickbacks, rigged subcontractor bids, and billed the government for duplicative or poorly performed work under the Department of Defense’s LOGCAP contract for logistical support services in Iraq and Afghanistan. The court found that Barko had not produced sufficient evidence to allow a jury to find in his favor on any of the multiple FCA theories advanced in the lawsuit. The court concluded the allegations were either not supported by admissible evidence, did not relate to FCA elements, or both. Of note, the court held that public vouchers on cost reimbursement contracts do not themselves make any representation as to the reasonableness of the underlying costs, and that they do not certify compliance with any law, regulation, or contract or say anything about the underlying competitive bidding of subcontracts.
Fifth Circuit Holds Public Disclosure Bar Is No Longer Jurisdictional, Affirms Summary Judgment on Materiality Grounds
The Fifth Circuit recently affirmed a decision granting summary judgment to BP in relation to an FCA lawsuit filed by a former employee in relation to an oil rig in the Gulf of Mexico. The employee alleged BP did not have all the necessary documentation for the rig and that many of the documents the company did obtain were not approved by engineers as required, and that BP had falsely certified its compliance with the documentation requirements. The decision reinforced the “demanding” materiality standard set by the Supreme Court in its decision in Escobar. In this case, the relator’s claims prompted Congress to ask the Department of Interior to investigate. When DOI allowed the rig to continue operating, the court interpreted that decision as meaning the regulatory compliance requirements related to the rig were not material.
The court also disagreed with BP that it lacked jurisdiction to hear the complaint due to the FCA public disclosure bar, finding that language in the 2010 Affordable Care Act altered the jurisdictional nature of the public disclosure bar.