False claims submitted under construction and procurement contracts with the government can serve as the basis for a lawsuit under the False Claims Act (FCA). The FCA allows whistleblowers to file a civil lawsuit on behalf of the government and receive a share of any award.
In this context, false claims can include (1) false statements and certifications of work performed; (2) false statements of product quantity or quality; (3) billing for nonexistent, worthless, or defective goods; (4) charging exorbitant prices for goods or services; (5) bid-rigging; and (6) misrepresentations of contract eligibility. These claims can span industries including construction, manufacturing, energy, technology, aerospace, and shipping.
This category of FCA actions can offer exceptionally high damages due to the value of government contracts for construction and procurements. For example, in November 2018, the Department of Justice announced that three South-Korean based companies had settled a civil matter related to allegations of bid-rigging in the energy sector for $154 million. Press Release, Off. of Pub. Aff., U.S. Dep’t of Justice, Three South Korean Companies Agree to Plead Guilty and to Enter into Civil Settlements for Rigging Bids on United States Department of Defense Fuel Supply Contracts (2018). When combined with criminal penalties, the three companies agreed to pay a total of $236 million to settle these allegations.