A contractor filing false prevailing wage certifications was reminded just how costly it can be to run afoul of a False Claims Act charge. After a trial on damages, the federal court judge found that the contractor was paid $254,298.18 for the electrical portion of the project (the part involving the false wage certifications). The government's damages under the False Claims Act (FCA) are treble that amount, or $762,894.54. There is no credit for value of work put in place, and no consideration of value to the government. The damages are three times the amount paid by the government for the pertinent portion of the work, regardless of whether that amount was purely cost to the contractor, or included any profit.
Even with the false wage payments, the amount paid for electrical work presumably included some legitimate costs. So, not only does the contractor fail to recover legitimate costs, but the contractor must reimburse the government for three times the amount received from the government. This will be a costly – and memorable – lesson to the contractor.
The final amount after the damages trial in this case is less than the original determination, which was appealed (and apparently included money paid on other projects not in contention), but there is now more certainty to the dollars. Other contractors have learned this lesson, and most find the tuition to be quite steep.
The contractor is Circle C Construction, and the decision issued from the U.S. District Court for the Middle District of Tennessee on August 22, 2014.
Disclaimer: This Alert has been prepared and published for informational purposes only and is not offered, nor should be construed, as legal advice. For more information, please see the firm's full disclaimer.
