How Can the False Claims Act Expose Federal Contractors Beyond the Federal Level?
DOJ, FAR rules, and cost principles show FCA risk can extend to state, local, and governmentwide consequences, plus disclosure duties and exclusion exposure.
AI-assisted and automatically checked against the linked primary sources.
What does this exposure look like in the cited rules?
According to DOJ’s Civil Rights Fraud Initiative, the Department will use the False Claims Act to investigate and, where appropriate, pursue claims against recipients of federal funds that knowingly violate federal civil rights laws, and it says the Civil Fraud Section and Civil Rights Division will coordinate with other federal agencies, state attorneys general, and local law enforcement. FAR Subpart 9.4 adds a separate governmentwide consequence: debarment and suspension are recognized by Executive Branch agencies, and the subpart contemplates coordinated action when more than one agency has an interest. FAR 31.205-47 also treats proceedings brought by a federal, state, local, or foreign government, including third-party FCA actions, as relevant to cost allowability when the specified outcomes occur. For internal controls, FAR 52.203-13 requires a written code of business ethics and conduct, due diligence to prevent and detect criminal conduct, and written disclosure of credible evidence of certain fraud or False Claims Act violations to the agency OIG with a copy to the contracting officer.
What internal controls does FAR 52.203-13 expressly require?
Important Note
FAR 52.203-13 says “full cooperation” does not require a contractor or its personnel to waive attorney-client privilege or work-product protection, and it does not restrict an internal investigation or a defense of a related proceeding.
- DOJ’s Civil Rights Fraud Initiative uses the False Claims Act against recipients of federal funds that knowingly violate civil rights laws and coordinates with state attorneys general and local law enforcement.
- FAR Subpart 9.4 says debarment and suspension can be recognized by Executive Branch agencies as governmentwide exclusions.
- FAR 31.205-47 ties certain proceedings brought by federal, state, local, or foreign governments, including third-party FCA actions, to cost allowability outcomes.
- FAR 52.203-13 requires a written code, due diligence, and timely disclosure of credible evidence of FCA violations to the agency OIG and contracting officer.
Sources & Citations
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