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January 2013 Archives

Knowingly underbidding a federal contract could amount to a false claim, resulting in a claim under the False Claims Act

The recent 9th Circuit federal appeals case of Nyle J. Hooper vs. Lockheed Martin Corp. confirmed that a bidder could be subject to a false claims action under the federal False Claim Act (?FCA?) after knowingly underbidding a cost-plus bid.The FCA (1 U.S.C. ??3729 et seq.) allows the government and/or third parties to file claims against bidders who make false claims for government funds. In Hooper, Lockheed bid on a space related contract, which was let out as a cost plus award fee contract, under which the contractor was reimbursed for costs incurred, and paid periodic ?award fees? based on performance Bidders for the contract had to provide an estimate of costs as a part of their bid. Lockheed was awarded the contract after providing a bid estimate of $432.7 million, but ended up being paid over $900 million. A disgruntled Lockheed engineer whistleblower made a qui tam claim under the FCA, alleging Lockheed had intentionally underbid the project.

News laws impacting the construction industry become effective in 2013

With the New Year here, construction professionals can welcome in a series of new laws which will impact the industry. Mr. Last has compiled a list of these legislative developments, which become effective in 2013. The list is posted on our website, and can be viewed via this link.

Court confirms designers may be liable to HOAs for defects under tort law and SB 800

A new California appellate court opinion (Beacon Residential Community Association v. Skidmore, Owings & Merrill LLP et al), issued December 13, 2012, confirms that construction design professionals may be held liable to third parties, including homeowners associations, for defects resulting from design decisions. The court held that both common law negligence and California's construction defect statute SB 800 could support a claim.

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