The False Claims Act – Violations of Gsa Contracts

The General Services Administration (“GSA”) is an independent agency of the United States government tasked with administering and supporting federal agencies and the federal workforce.  The GSA supplies products for federal government offices, provides transportation and office space to federal employees, and creates government policies regarding cost reduction.  As with most governmental contracts, violations of certain requirements can give rise to whistleblower claims.

In 2019, the software company Informatica LLC paid $21.57 million to resolve allegations that it overcharged the government by misrepresenting its discounting practices when negotiating with the GSA for government-wide contracts.

Two of the more common types of Federal Claims Act (“FCA”) violations with respect to GSA contracts include the GSA’s “best pricing” requirement and The Federal Trade Agreements Act.

Failure to Comply with “Best Pricing” Requirements:  The government requires vendors to treat the government as the vendor’s “most favored customer” (i.e., a customer or category of customers that receives the best discounts from the vendor’s commercial price list).  GSA negotiators require discounts from the vendor’s commercial price list which are equal to or greater than the vendor’s most favored customer discounts.  If, after the contract is awarded, a contractor gives a non-government customer a better pricing structure, the contractor is in violation of the FCA.

Failure to Comply with The Federal Trade Agreements Act:  The Federal Trade Agreements Act restricts the procurement of goods and services by the government from countries with which the U.S. does not have satisfactory trade relationships.  This means that vendors can only sell goods to the government that are made (or “substantially transformed,” as provided in the law) in “eligible” countries – that is, those that have reciprocal trade agreements with the U.S., such as Canada, Mexico, England, France and Japan.  Countries that are not eligible include: China, Taiwan, Malaysia and South Africa.  If a vendor sells goods made in non-eligible countries to government agencies, they may be in violation of the FCA.

If you have, or think you have, witnessed a violation of a contract with the GSA, the whistleblower lawyers at Bernstein Liebhard can help. Contact Michael S. Bigin or Laurence J. Hasson for a free, confidential consultation.