Key Takeaways for Companies to Consider When Doing Government-Contract Work

Key takeaways for companies to consider when doing government-contract work -

Brownstein’s litigation team scored a major victory for client Flintco, a New Mexico-based contractor, in one of New Mexico’s first trials under the Fraud Against Taxpayers Act. The recently adopted act allows a person to sue on behalf of taxpayers when public funds are involved. In this case, the plaintiffs were seeking approximately $8.8 million in total damages related to a $60 million renovation project on the University of New Mexico's Pit. After mandatory trebling of damages, potential statutory fines and attorney fees, total damages would have been close to $30 million. The monetary damages were daunting for Flintco. What was equally concerning, however, was the potentially devastating reputational hit the 76-year-old local company faced.

Brownstein’s litigation team maneuvered through what is considered uncharted territory because very few Fraud Against Taxpayers Act cases ever make it to trial. This was one of the first in New Mexico, if not one of the first nationally. In fact, the majority of these cases settle because the consequences of going to trial can be devastating for a company, including: additional bad publicity over a longer period of time, the possibility of being banned from government contracting, and less control over which subsidiary of the company will be banned.

Brownstein’s client was vindicated when a 12-person Santa Fe jury decided Flintco did not violate the Fraud Against Taxpayers Act. The successful litigation team of Eric Burris and Adam Lyons created the following five points for companies to consider when doing government-contract work.

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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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