Contractors Vulnerable to Growing Number of ‘False Claims’ Suits

Contractors Vulnerable to Growing Number of ‘False Claims’ Suits

July 7, 2014, National Defense Magazine

Susan Cassidy and Mike Wagner authored this article on the increase of "false claims" suits. 

Under a recent court decision by the Fourth Circuit, a federal government contractor may suddenly find itself facing potentially massive liability based solely on the number of invoices submitted in previous years, even if every one of those invoices was entirely accurate. 

If allowed to stand, the Fourth Circuit’s ruling in United States ex rel. Bunk v. Gosselin World Wide Moving, N.V., 741 F.3d 390 (4th Cir. 2013) will make the defense industry more vulnerable to a growing number of suits brought under the False Claims Act. 

Under the so-called “per-invoice rule” adopted in the case, contractors could be subject to millions of dollars in civil penalties under the FCA based solely on how often they happen to invoice the government, even if the government has not suffered any damages.