Claims on Public Works Projects 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.

Have You Given Proper Notice of The Delay? California Appellate Court Permits Assessment of Liquidated Damages Due to Contractor's Failure To Give Notice of Delay.

In a recent case entitled Greg Opinski Construction v. City of Oakdale, 199 Cal.App.4th 1107 (2011) a California Appellate Court held that when a construction contract requires notice be given as a condition for getting an extension of time and notice is not given, the contractor cannot later claim that the delay was caused by the owner. This is noteworthy since it refutes prior precedent that allowed a contractor to assert that the liquidated damages should not be assessed since the public entity delayed the project during a period of owner caused delay.

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