One contractor’s red tape is another contractor’s effective rule.
Although the Contract Disputes Act (CDA) has long required contractors to certify that certain claims for payment are accurate and complete, some say certification is unnecessary given the fraud deterrent the False Claims Act (FCA) provides. Reliance on the FCA to combat contractor fraud has grown immensely since the CDA became law. The Justice Department obtained more than $4.7 billion in cases under the FCA in fiscal 2016 — a $1 billion jump from fiscal 2015. Twenty years ago, recoveries didn’t top $100 million.
Perhaps the FCA now looms large enough to incentivize honesty in contractors’ claims and eliminate certification.
“The prospect of civil or criminal prosecution under the FCA is too remote and detached” to eliminate certification, said Daniel Kelly, a partner with McCarter & English LLP in Boston.