Edwin P. Harrison, and United States of America, Party in Interest v. Westinghouse Savannah River Company
176 F.3d 776 | Court of Appeals for the Fourth Circuit | 1999
What This Case Means for Subcontractors
A subcontractor sued Westinghouse Savannah River Company under the False Claims Act, claiming the contractor made false statements to the Department of Energy to get approval for a subcontract—specifically misrepresenting costs, duration, and conflicts of interest. The district court dismissed the case, but the Fourth Circuit reversed, ruling that false statements made to obtain government contract approval can trigger False Claims Act liability, even if no actual payment claim was submitted yet. This matters to subcontractors because it means contractors can face serious penalties for lying during the approval process, and subcontractors may have grounds to report such fraud.
Key Takeaways
- •False statements made to get government approval of a subcontract can violate the False Claims Act—you don't have to wait for a false payment claim to be submitted
- •Misrepresenting subcontract costs, duration, or conflicts of interest to the government is actionable fraud, even if the misrepresentation doesn't directly affect payment amounts
- •If your prime contractor lies to the government about your subcontract terms or qualifications to get approval, document everything and consider consulting a lawyer about whistleblower protections
False Claims Act liability may attach whenever false statements are made in transactions involving calls on the U.S. fisc.
Frequently Asked Question
Can a contractor get in trouble for lying to the government just to get my subcontract approved?
Yes. The Fourth Circuit ruled that false statements made to obtain government approval of a subcontract—such as misrepresenting costs, timeline, or conflicts of interest—can violate the False Claims Act. The contractor doesn't have to submit a false payment claim; the lie during the approval process itself is enough. If you suspect this is happening, document it and speak with an attorney about whistleblower protections.
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