Q. Do government contract laws and regulations provide for any potential criminal liability in the procurement or performance of government contracts?
A. Yes. Major laws and regulations providing criminal sanctions for actions taken in the procurement or performance of government contracts include:
The Anti-Kickback Act, 41 U.S.C.
A. §§ 51-54, makes it a criminal offense for any subcontractor under a prime government contract to knowingly influence the award of a subcontract by making payments to any higher-level subcontractor or prime contractor.
Under the False Statements Act, Title 19 U.S.C. § 1001, it is a criminal offense for a contractor to make false statements to the government. If a contractor submits a bid or proposal, invoice, certified pricing document or any other submission, written or oral, to the government containing false information, the contractor may be criminally liable for such false statements under the False Statements Act. This Act also provides for criminal penalties against individuals for submitting false statements to the government.
There are both criminal and civil penalties for violations of the False Claims Act, and the government frequently pursues both against contractors who knowingly submit false claims for payment. Contractors may also be criminally liable under the False Claims Act if they improperly and intentionally substitute specific products or services required under a contract with other products or services, without the government’s knowledge or consent.
The Sherman Antitrust Act provides for both criminal and civil penalties against contractors who engage in bid rigging and collusive pricing.
Corporate officers and directors may be held personally liable under many of the above statutes, if they are aware of serious contract compliance violations and consciously fail to resolve such violations.
Q. Does our company face possible criminal exposure in its government contracts business? What if any recent developments have there been in this area, and what can we do to address the issue?
A. There have been significant developments in Washington directly impacting government contractors. Government contractors need to stay abreast of recent regulatory changes and how they can protect themselves.
In 2006, the Department of Justice announced the formation of the National Procurement Fraud Task Force. This new initiative is aimed at detecting and criminally prosecuting allegedly fraudulent business activities within the rapidly expanding world government contracts. Such focus includes among other things scrutiny of invoices and billing practices.
Dealings with the government are under greater scrutiny than ever before. Increasingly, authorities are relying on criminal prosecution or parallel civil and criminal actions to address alleged wrongdoing. Your company may be facing a wide rage of complicated obstacles. Among the tools at the disposal of regulators are grand jury investigations, subpoenas, and even search warrants. Debarments and Suspensions can block your company from dealing with the government – temporarily or even indefinitely.
Our government contracts practice in conjunction with our criminal defense practice is uniquely qualified to handle the most sensitive of matters. Albo & Oblon attorneys provide a depth of experience arising from both defense and prosecutorial backgrounds. The firm deploys this background to assist government contractors with such white collar issues as they arise. The Firm has an established record of success in dealing with a wide range of white collar defense issues in both Federal and local state courts.
Albo & Oblon represents individuals as well as companies and their executives alike. We provide our clients counseling and representation throughout all stages of a criminal case – from investigation to grand jury, indictment and trial. In certain cases, we are able to resolve disputes through negotiation with regulatory authorities or law enforcement without charges being filed. The Firm counsels companies on how to conduct business to prevent issues from arising, and how to comply with procurement integrity requirements. When prevention is not enough, Albo & Oblon attorneys have extensive litigation and trial experience and are ready to defend our clients aggressively.
