On September 18, 2025, the Department of Justice (“DOJ”) announced a civil False Claims Act (“FCA”) settlement against a New Jersey shipbuilder to resolve allegations that it improperly employed unauthorized workers to work on Navy ships. The settlement, which exceeded $4 million, is the second this year involving government contractors alleged to have employed unauthorized workers in violation of FAR 52.222-54, Employment Eligibility Verification. With immigration enforcement squarely at the center of the current administration’s domestic agenda, government contractors should be mindful of this enforcement theory and take appropriate steps to ensure compliance and protect themselves from a costly FCA claim. Continue Reading E-Verify and the False Claims Act: An Emerging Tool in Immigration Enforcement
Latest Cybersecurity False Claims Act Settlement with Diagnostics Provider Focuses on Sensitive Health Systems
In a recently announced settlement agreement with the U.S. Department of Justice (“DOJ”), Illumina, Inc. (“Illumina”) agreed to pay $9.8 million to resolve claims arising from alleged cybersecurity vulnerabilities in genomic sequencing systems that the company sold to federal agencies. The case is the latest in a series of False
Continue Reading Latest Cybersecurity False Claims Act Settlement with Diagnostics Provider Focuses on Sensitive Health SystemsSPEEDing up Procurement?: House Armed Services Bill Seeks to Reform Defense Acquisition
The Trump Administration continues to focus on procurement reform aimed at increasing acquisition efficiency, including through the “Revolutionary FAR Overhaul” and reinforced preference for commercial products. Now, with the House Armed Services Committee (HASC) introducing a defense procurement reform bill, it is clear that HASC leadership is also targeting increased efficiency as a key goal of the Fiscal Year 2026 National Defense Authorization Act (FY26 NDAA). We cover the bill’s key proposals and their potential impact on defense contractors below.Continue Reading SPEEDing up Procurement?: House Armed Services Bill Seeks to Reform Defense Acquisition
Justice Department Establishes Civil Rights Fraud Initiative, Using False Claims Act to Target DEI
On May 19, 2025, Deputy Attorney General Todd Blanche issued a memorandum establishing a DOJ Civil Rights Fraud Initiative. The Initiative will use the False Claims Act (“FCA”) to “investigate and . . . pursue claims against any recipient of federal funds that knowingly violates federal civil rights laws.” Educational institutions, federal contractors, grantees, and other entities that receive federal funding should take note of the latest FCA Initiative. Similar FCA initiatives, such as those focused on collusion and cybersecurity fraud, have resulted in significant related FCA enforcement.Continue Reading Justice Department Establishes Civil Rights Fraud Initiative, Using False Claims Act to Target DEI
Congress Attempts to Revitalize the Program Fraud Civil Remedies Act
Since 1986, the little brother to the civil False Claims Act, known as the Program Fraud Civil Remedies Act of 1986 (“PFCRA”), has seen very little use. Section 5203 of the Fiscal Year 2025 National Defense Authorization Act (“NDAA”) seeks to breathe new life into the law by renaming it
Continue Reading Congress Attempts to Revitalize the Program Fraud Civil Remedies ActWondering Whether Your IDIQ Award Will Be Subject to CAS? New Rules May Be Coming Soon from the CAS Board.
The Federal government may soon adopt new rules for when indefinite delivery contracts and orders are subject to the Cost Accounting Standards. According to a June 18, 2024 notice, the CAS Board is considering multiple different approaches to this issue, and it has invited comments from the public.Continue Reading Wondering Whether Your IDIQ Award Will Be Subject to CAS? New Rules May Be Coming Soon from the CAS Board.
ASBCA Issues Annual Report, Providing Data on How Often Contractors Prevail
The Armed Services Board of Contract Appeals has issued its annual report for FY 2023, shedding light on how often contractor appeals reach a successful result, and what agencies are most frequently involved in contract litigation.Continue Reading ASBCA Issues Annual Report, Providing Data on How Often Contractors Prevail
ASBCA: Government Can Pursue $151 Million Claim Under CAS 410
In Honeywell International, Inc., the ASBCA declined to dismiss a roughly $151 million claim by DCMA alleging a violation of CAS 410, holding that the government’s allegations were sufficient to state a claim for improper treatment of G&A expenses. The Board’s decision provides guidance on how to interpret CAS 410 — a topic that is often addressed by auditors, but has rarely been the subject of written opinions by the courts or boards of contract appeals.Continue Reading ASBCA: Government Can Pursue $151 Million Claim Under CAS 410
Amici Curiae Submit Brief Urging Supreme Court to Adopt “Objectively Reasonable” FCA Knowledge Standard
The Coalition for Government Procurement and the National Defense Industrial Association filed an amicus brief in the consolidated Supreme Court cases United States ex rel. Schutte v. SuperValu, Inc. and United States ex rel. Proctor v. Safeway, Inc. The brief urges the Court to hold, consistent with the decisions of multiple federal courts of appeals, that a defendant cannot be liable under the False Claims Act (“FCA”) for “knowingly” submitting a “false” claim if (1) it acted in accordance with an objectively reasonable reading of an ambiguous statute, regulation, or contract provision and (2) there was no authoritative guidance warning it away from that interpretation. The Amici are represented by Covington & Burling LLP.
In SuperValu and Safeway, the Court is asked to resolve questions over the role that subjective intent plays in evaluating whether a defendant satisfies the FCA’s “knowledge” requirement. Petitioners argue that a contractor can be liable under the FCA for submitting a claim that is premised on an objectively reasonable interpretation of an ambiguous legal provision if the contractor recognized that the provision could be interpreted a different way. However, as the amicus brief explains, such a claim cannot be false for alleged noncompliance with the ambiguous legal provision that has not otherwise been clarified by authoritative guidance. Nor can such a contractor knowingly submit a false claim just because it was aware that the legal obligation may be interpreted differently.Continue Reading Amici Curiae Submit Brief Urging Supreme Court to Adopt “Objectively Reasonable” FCA Knowledge Standard
So the Auditor Says You Violated CAS? Remember, Your Business Judgment Matters When Determining Compliance
Contractors often assume that government auditors have special authority to interpret the Cost Accounting Standards. That assumption is easy to understand — auditors frequently take the position that there is just one “right” way for a company to do its contract cost accounting, based on how other companies do things. But contractors should know that CAS is flexible and generally gives them options about how to comply, based on the circumstances of their business. In short, a contractor’s business judgment matters, and contractors can use it to push back on auditors who take an overly rigid view of CAS.Continue Reading So the Auditor Says You Violated CAS? Remember, Your Business Judgment Matters When Determining Compliance