	Introduction

The federal government relies heavily on contractors to supply it with goods and services. Each year, fraud by these contractors potentially costs the government billions of dollars. Detecting, prosecuting, and deterring contractor fraud poses a challenge to federal agencies, which often possess limited resources. Since that time, Congress has enacted several statutes that allow the federal government—and in some instances, private parties—to recover damages, civil penalties, or forfeitures for false or fraudulent claims for payment and other misconduct. The government has also recovered large civil penalties and forfeitures from contractors who submit fraudulent claims for payment as part of the contract disputes process, including in a recent case in which the Federal Circuit affirmed the Court of Federal Claims' (COFC's) assessment of a $50.6 million civil penalty against a contractor under the Contract Disputes Act's (CDA's) anti-fraud provision and rendered judgment of forfeiture of a $13.3 million contractor claim under the Forfeiture of Fraudulent Claims Act (FFCA). In addition to the significant damage awards that plaintiffs may recover under some of these statutes, courts may find a contractor civilly liable under these laws for conduct that may not amount to fraud under traditional common law definitions. Congress has an interest in the scope of federal civil fraud remedy statutes. In order to be effective, these statutes must be broad enough to punish and deter fraud that often evades detection, wastes taxpayer funds, and negatively impacts government programs. On the other hand, if courts interpret a fraud statute so broadly that it imposes civil liability on contractors for minor regulatory violations or ordinary breaches of contract—possibly resulting in a contractor having insufficient notice as to which actions will result in liability —contractors may decline to compete for government contracts. This could lead to higher prices for the government. Under the implied false certification and fraud in the inducement theories, claims for payment that are not explicitly false may become false by implication because of a party's actions or omissions prior to contract formation or during contract performance. Some courts have expressed concerns that, under these theories, a defendant could become liable for ordinary breaches of contract or minor regulatory violations. The FCA authorizes the Attorney General, as well as certain private parties that sue on behalf of the United States under the act's qui tam provisions (known as "relators"), to bring a civil action against an alleged violator of the act. The Federal Circuit's recent decision in Daewoo Engineering Co., Ltd. v. United States demonstrates that the CDA's anti-fraud provision may result in a significant civil penalty for a contractor when it submits a fraudulent claim to the government during a contract dispute in order to extract a settlement. Anti-Fraud Provision

The CDA contains an anti-fraud remedy primarily because of concerns that contractors would submit inflated claims during contract disputes as a "negotiating tactic," leading the government to settle these claims instead of using its limited resources to evaluate them on the merits. For example, courts disagree about whether fraud sufficient for forfeiture may involve fraud in connection with the execution or performance of the contract in addition to fraud related to submission of a claim. Program Fraud Civil Remedies Act

The Program Fraud Civil Remedies Act (PFCRA) provides an administrative process under which certain federal agencies may obtain civil remedies and assessments from "persons" who knowingly make false, fraudulent, or fictitious claims or statements to the agencies. The act's legislative history suggests that Congress intended the PFCRA to remedy the "small-dollar cases" of fraud that the Department of Justice (DOJ) had declined to pursue in court because of litigation costs. Other recent regulatory and judicial developments may also affect contractors' potential exposure to civil liability and damages under the FCA.
Because the federal government relies heavily on contractors to supply it with goods and services, fraud by these contractors potentially costs the government billions of dollars annually. Detecting, prosecuting, and deterring contractor fraud poses a challenge to federal agencies, which often possess limited resources. To combat contractor fraud, Congress has enacted several statutes that allow the federal government—and in some instances, private parties—to recover damages, civil penalties, or forfeitures against parties that make false or fraudulent claims for payment or engage in other misconduct. These statutes may impose civil liability for conduct that does not amount to fraud under traditional common law definitions and potentially allow for significant recoveries.
Generally, the False Claims Act (FCA) authorizes the Attorney General, as well as certain private parties, to bring a civil action against "any person" who makes a false claim for payment from the government. Recently, some courts have held that claims for payment that are not explicitly false may become false by implication because of a party's actions or omissions prior to contract formation or during contract performance. However, some of these same courts have expressed concerns that such theories could lead to liability for ordinary breaches of contract or insignificant regulatory violations, and have thus imposed limitations on their use by the government or private parties that sue on behalf of the government. Other recent regulatory and judicial developments may also affect contractors' potential exposure to civil liability and damages under the FCA.
The Contract Disputes Act (CDA) sets forth procedures for the resolution of claims and disputes involving certain contracts awarded by executive agencies. The CDA contains an anti-fraud remedy because of concerns that contractors would submit inflated claims during contract disputes as a "negotiating tactic," leading the government to settle these claims instead of using its limited resources to evaluate them on the merits. The Federal Circuit's notable decision in Daewoo Engineering Co., Ltd. v. United States demonstrates that the CDA's anti-fraud provision may result in a significant civil penalty for a contractor that submits a fraudulent claim to the government in an effort to extract a settlement offer.
Under the Forfeiture of Fraudulent Claims Act (FFCA), a contractor that brings a fraudulent contract claim against the government in the Court of Federal Claims (COFC) may have to forfeit all of its claims under the contract. Courts disagree over whether fraud sufficient for forfeiture may relate to the execution or performance of the contract in addition to submission of a claim.
The Program Fraud Civil Remedies Act (PFCRA) provides an administrative process under which certain federal agencies may impose civil remedies or assessments on "persons" who knowingly make false, fraudulent, or fictitious claims or statements to the agencies in "small-dollar cases" of fraud that the Department of Justice (DOJ) declines to pursue in court. Few federal agencies use the PFCRA, leading some to recommend that, among other things, Congress raise the act's jurisdictional cap and civil penalty limit; allow agencies to retain recovered funds; and simplify the act's procedural requirements.
Congress is perennially interested in the scope of federal civil fraud remedy statutes. In order to be effective, these statutes must be broad enough to punish and deter fraud that often evades detection, wastes taxpayer funds, and negatively impacts government programs. On the other hand, if courts interpret a fraud statute so broadly that it imposes civil liability on contractors for minor regulatory violations or ordinary breaches of contract, contractors may decline to compete for government contracts, potentially leading to higher prices for the government.