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Using the Federal False Claims Act to Enforce Davis Bacon

November 25, 2010 Written by: Written by Mike Rogers, Chief Compliance Officer

An order that government contractor Circle C Construction, LLC pay treble damages to the US Government for breaching its agreement to abide by the Davis-Bacon requirements to pay prevailing wages, in violation of the federal False Claims Act, serves as a harsh warning for government contractors.

Total damages in the judgment against Circle C, a company which has held government contracts for more than 20 years, are $1,661,243,13.  The United States Government filed a lawsuit against Circle C and its electrical subcontractor, Phase Tech, LLC in 2008.  In the lawsuit, the government alleged that Circle C:

• Failed to disclose Phase Tech as a subcontractor;
• Failed to identify any of Phase Tech’s employees; and
• Falsely certified that Circle C and its agents were paying the prevailing wages to employees which were required by the contract.

It’s critical for contractors to list all subcontractors and subcontractor employees when filing reports.  Failure to do so can result in substantial fines, particularly if a lawsuit is filed using the federal False Claims Act.