False Claims Act issues can affect property owners and construction professionals and create significant legal liability, according to a new publication from Haynes Boone Government Contracts Partner Ed Amorosi and Counsel Neil Issar.
Their new book chapter titled “Owner, Design Professional, and Construction Manager Conduct Giving Rise to Civil False Claims Act Liability,” will be included in the second edition of the book “False Claims in Construction Contracts”. The book is sponsored by the American Bar Association’s Forum on Construction Law.
The chapter’s key takeaways include:
• False representations or statements made by an owner of real property during negotiations with the government over terms, such as contract eligibility or project costs, can serve as the basis of an FCA violation. Courts have held that even if there are no false statements or misrepresentations in the claims submitted during the subsequent performance of the contract, the initial fraud may constitute fraudulent inducement to enter into the contract and “taint” every subsequent claim.
• As in the contract negotiation process, false claims or certifications made by a property owner in the federal loan or grant application process can create potential liability under the FCA.
• False certifications can also be included in the reports that owners may be required to regularly submit to obtain federal funds.
• Property owners also need to be cognizant of the risk of facing FCA liability vicariously based on the actions of employees or agents, such as a superintendent managing the property.
• Design professionals, such as architects, engineers and construction managers, often play important roles in federally funded infrastructure and construction projects and can face FCA liability for submitting false claims, overbilling and misrepresentations in design or qualifications.
Read more here.
