A PubKGroup Product
With PubKCompliance, federal contractors can stay abreast of the changing regulatory environment and avoid running afoul of legal and ethical mandates. We deliver to your inbox the latest information on ethics, compliance, and enforcement impacting government contracting — from best practices and insights, to government audit and investigation reports and Congressional and GAO oversight, to False Claims Act cases and suspensions and debarments.
A curated email to stay up to date on the changing compliance and enforcement environment
PubKCompliance Event Board
Upcoming training and other events
Quickly find past developments at no additional cost
William Weisberg writes about a recent $110,000 Justice Department settlement in a False Claims Act case, which could serve as a precedent for the future handling of Organizational Conflicts of Interest in government contract bids.
When a contractor has an unfair competitive advantage from previous work done, has impaired objectivity in doing work for the government, or another conflict of interest, they are required to disclose it; otherwise they certify that they have none.
Previously, most contractors assumed that the worst thing that could happen with an undisclosed or unmitigated OCI is that they would lose a contract after a GAO bid protest. This six-figure settlement penalty raises the stakes substantially. To protect themselves, Weisberg recommends that contractors implement a formal OCI screening process as part of their proposal preparation.
In order to provide an overview for busy in-house counsel and compliance professionals, we summarize some of the most important international anti-corruption developments from the past month, with links to primary resources. This month we ask: How will new policies announced by the U.S. Department of Justice (DOJ) affect prosecutions of individuals and cases involving China? How is one African country reacting to alleged bribery by Chinese nationals? How many FCPA-related tips did the U.S. Securities and Exchange Commission (SEC) Office of the Whistleblower receive in Fiscal Year 2018? The answers to these questions and more are here in our November 2018 Top 10 list.
Read our client alert.
On December 21, 2018, the Civil Division of the US Department of Justice (DOJ) announced that it recovered over US$2.8 billion from civil False Claims Act (FCA) judgments and settlements in the fiscal year ending September 30, 2018. This was DOJ’s lowest annual FCA recovery since FY2009, and the second straight year of falling FCA recoveries, down from US$3.5 billion in FY2017 and US$4.9 billion in FY2016. Our analysis of DOJ’s raw data suggests this year’s drop stems from a sharp dip in recoveries for non-healthcare cases. Meanwhile, healthcare-related cases continued to dominate the FCA docket, accounting for two-thirds of all new FY2018 filings and 87 percent of all FY2018 recoveries (US$2.5 billion)—the highest proportion of total recoveries ever. FY2018 is also the ninth consecutive year to see over US$2 billion in healthcare-related recoveries.
Yet the overall number of new FCA matters fell for the second year in a row: only 767 new matters were brought in FY2018, down from 825 last year and 856 the year before. The decline is due largely to a 10 percent drop in healthcare cases filed by private qui tam relators since last year. The reasons for this decline remain unclear, given that the relators’ bar is not bound by DOJ’s enforcement priorities.
The Justice Department has filed a complaint against YRC Freight, Roadway Express, and Yellow Transportation, alleging that the firms systematically overcharged the government for freight carrier services for more than seven years.
The government charges that the companies overcharged the Department of Defense by millions of dollars for shipments that were actually lighter, and thus cheaper, than what they were charged for. The companies allegedly reweighed thousands of shipments and suppressed the results whenever they indicated that a shipment was actually lighter than its original estimated weight, intentionally charging based on inflated weights.
The Treasury Department’s Office of Foreign Assets Control has announced that Cobham Holdings, Inc. has agreed to pay $87,507 to settle violations of U.S. sanctions on Ukraine and Russia.
The reported violations were committed by Cobham’s former subsidiary Metelics, which was accused of selling products through distributors in Canada and Russia to Almaz Antey Telecommunications LLC. That company which was not on the OFAC List of Specially Designated Nationals and Blocked Persons, but was 51 percent-owned by JSC Almaz-Antey, which was.
A search program that failed to catch the not-exactly-matching names has been blamed for Metelics not noticing the connection. Thad McBride of Bass, Berry & Sims warns that this explanation was not enough to protect Cobham from punishment.