Congress Increases False Claims Liability for Public Works Contractors

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The Fraud Enforcement and Recovery Act (FERA)1 was signed into law in May 2009. Among other significant changes, FERA expanded the grounds for liability under the False Claims Act (FCA).2 Public works contractors who work on projects funded with federal funds now stand an increased risk for potential liability under the FCA. The FCA now covers, for example, state and local agency projects where the public agency has received a grant of federal funds to build the project. And it includes projects only partially funded by federal money. Accordingly, federal, state, and local contractors should ensure that they have appropriate compliance systems and controls in place to deal with the enhanced FCA.

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DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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