On October 31, 2015, the U.S. Court of Federal Claims (CoFC) in Horn & Associates, Inc. v. United States (No. 08-415C) rejected three fraud-based counterclaims that were filed by the U.S. Government in response to a breach of contract action brought by the plaintiff, Horn & Associates (Horn), through a certified claim under the Contract Disputes Act (CDA). The counterclaims were asserted under the Special Plea in Fraud statute, the False Claims Act, and the CDA, respectively. The CoFC dismissed the claims because the Government could not establish that Horn had intended for its certified claim to deceive the Government.
Horn is a cautionary tale for government contractors that submit certified claims under the CDA. As discussed below, Horn was vulnerable to fraud counterclaims because its certified claim was “prepared and presented  in an unorthodox and unfamiliar manner,” with a confusing quantification and presentation of damages. Although the CoFC dismissed the counterclaims, its opinion could be limited to its particular facts, which involved an unusually difficult calculation of damages. A lesson to be learned, however, is that government contractors might avoid such confusion (and such opportunistic counterclaims) by having sufficient clarity and transparency in the preparation and presentation of their certified claims.
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