VOL. 5 NO. 2. gao recommends improvements to subcontracting under va s veterans First program Mitchell A. Bashur and Vijaya S.

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1 An A.S. Pratt Publication FEBRUARY 2019 VOL. 5 NO. 2 pratt s Government Contracting Law Report Editor s NotE: CoNtraCtiNg ComplExitiEs Victoria prussen Spears BErry amendment s NoN-availaBility ExCEptioN trumps agency market research eric Whytsell BEtwEEN a (Cda) rock and a (Fasa) hard place: Court of FEdEral Claims decision highlights difficulties in ChallENgiNg government actions related to task orders Douglas C. proxmire and Christopher Griesedieck, Jr. gao recommends improvements to subcontracting under va s veterans First program Mitchell A. Bashur and Vijaya S. Surampudi gao Bid protests Fy18 protest statistics and a look ahead Hopewell Darneille moving relationship management to the ForEFroNt of CompliaNCE strategy Cheryl Nagowski in the Courts Steven A. Meyerowitz supreme Court grants CErtiorari to resolve CirCuit split on FCa statute of limitations Sara N. Gerber

2 PRATT S GOVERNMENT CONTRACTING LAW REPORT VOLUME 5 NUMBER 2 FEBRUARY 2019 Editor s Note: Contracting Complexities Victoria Prussen Spears 29 Berry Amendment s Non-Availability Exception Trumps Agency Market Research Eric Whytsell 31 Between a (CDA) Rock and a (FASA) Hard Place: Court of Federal Claims Decision Highlights Difficulties in Challenging Government Actions Related to Task Orders Douglas C. Proxmire and Christopher Griesedieck, Jr. 35 Supreme Court Grants Certiorari to Resolve Circuit Split on FCA Statute of Limitations Sara N. Gerber 38 GAO Recommends Improvements to Subcontracting Under VA s Veterans First Program Mitchell A. Bashur and Vijaya S. Surampudi 41 GAO Bid Protests FY18 Protest Statistics and a Look Ahead Hopewell Darneille 44 Moving Relationship Management to the Forefront of Compliance Strategy Cheryl Nagowski 47 In the Courts Steven A. Meyerowitz 51

3 QUESTIONS ABOUT THIS PUBLICATION? For questions about the Editorial Content appearing in these volumes or reprint permission, please call: Heidi A. Litman at Outside the United States and Canada, please call (973) For assistance with replacement pages, shipments, billing or other customer service matters, please call: Customer Services Department at (800) Outside the United States and Canada, please call (518) Fax Number (800) Customer Service Website For information on other Matthew Bender publications, please call Your account manager or (800) Outside the United States and Canada, please call (937) Library of Congress Card Number: ISBN: (print) Cite this publication as: [author name], [article title], [vol. no.] PRATT S GOVERNMENT CONTRACTING LAW REPORT [page number] (LexisNexis A.S. Pratt); Michelle E. Litteken, GAO Holds NASA Exceeded Its Discretion in Protest of FSS Task Order, 1 PRATT S GOVERNMENT CONTRACTING LAW REPORT 30 (LexisNexis A.S. Pratt) Because the section you are citing may be revised in a later release, you may wish to photocopy or print out the section for convenient future reference. This publication is designed to provide authoritative information in regard to the subject matter covered. It is sold with the understanding that the publisher is not engaged in rendering legal, accounting, or other professional services. If legal advice or other expert assistance is required, the services of a competent professional should be sought. LexisNexis and the Knowledge Burst logo are registered trademarks of RELX Inc. Matthew Bender, the Matthew Bender Flame Design, and A.S. Pratt are registered trademarks of Matthew Bender Properties Inc. Copyright 2019 Matthew Bender & Company, Inc., a member of LexisNexis. All Rights Reserved. Originally published in: 2015 No copyright is claimed by LexisNexis or Matthew Bender & Company, Inc., in the text of statutes, regulations, and excerpts from court opinions quoted within this work. Permission to copy material may be licensed for a fee from the Copyright Clearance Center, 222 Rosewood Drive, Danvers, Mass , telephone (978) Editorial Office 230 Park Ave., 7th Floor, New York, NY (800) (2019 Pub.4938)

4 Editor-in-Chief, Editor & Board of Editors EDITOR-IN-CHIEF STEVEN A. MEYEROWITZ President, Meyerowitz Communications Inc. EDITOR VICTORIA PRUSSEN SPEARS Senior Vice President, Meyerowitz Communications Inc. BOARD OF EDITORS MARY BETH BOSCO Partner, Holland & Knight LLP DARWIN A. HINDMAN III Shareholder, Baker, Donelson, Bearman, Caldwell & Berkowitz, PC J. ANDREW HOWARD Partner, Alston & Bird LLP KYLE R. JEFCOAT Counsel, Latham & Watkins LLP JOHN E. JENSEN Partner, Pillsbury Winthrop Shaw Pittman LLP DISMAS LOCARIA Partner, Venable LLP MARCIA G. MADSEN Partner, Mayer Brown LLP KEVIN P. MULLEN Partner, Morrison & Foerster LLP VINCENT J. NAPOLEON Partner, Nixon Peabody LLP STUART W. TURNER Counsel, Arnold & Porter ERIC WHYTSELL Partner, Stinson Leonard Street LLP WALTER A.I. WILSON Senior Partner, Polsinelli PC iii

5 PRATT S GOVERNMENT CONTRACTING LAW REPORT is published twelve times a year by Matthew Bender & Company, Inc. Copyright 2019 Reed Elsevier Properties SA., used under license by Matthew Bender & Company, Inc. All rights reserved. No part of this journal may be reproduced in any form by microfilm, xerography, or otherwise or incorporated into any information retrieval system without the written permission of the copyright owner. For permission to photocopy or use material electronically from Pratt s Government Contracting Law Report, please access or contact the Copyright Clearance Center, Inc. (CCC), 222 Rosewood Drive, Danvers, MA 01923, CCC is a not-for-profit organization that provides licenses and registration for a variety of users. For subscription information and customer service, call Direct any editorial inquires and send any material for publication to Steven A. Meyerowitz, Editor-in-Chief, Meyerowitz Communications Inc., Grand Central Parkway Suite 18R, Floral Park, New York 11005, smeyerowitz@meyerowitzcommunications.com, Material for publication is welcomed articles, decisions, or other items of interest to government contractors, attorneys and law firms, in-house counsel, government lawyers, and senior business executives. This publication is designed to be accurate and authoritative, but neither the publisher nor the authors are rendering legal, accounting, or other professional services in this publication. If legal or other expert advice is desired, retain the services of an appropriate professional. The articles and columns reflect only the present considerations and views of the authors and do not necessarily reflect those of the firms or organizations with which they are affiliated, any of the former or present clients of the authors or their firms or organizations, or the editors or publisher. POSTMASTER: Send address changes to Pratt s Government Contracting Law Report, LexisNexis Matthew Bender, 630 Central Avenue, New Providence, NJ iv

6 GOVERNMENT CONTRACTING LAW REPORT Supreme Court Grants Certiorari to Resolve Circuit Split on FCA Statute of Limitations By Sara N. Gerber * The U.S. Supreme Court has granted certiorari to resolve a Circuit court split concerning whether False Claims Act relators may rely on the statute of limitations in 31 U.S.C. 3731(b)(2) a limitations period which is triggered by the government s knowledge of the fraud when the government does not intervene. The author of this article discusses the Circuit split and the grant of certiorari. The U.S. Supreme Court has granted a writ of certiorari 1 to address a Circuit court split concerning whether False Claims Act ( FCA ) relators may rely on the statute of limitations in 31 U.S.C. 3731(b)(2) a limitations period which is triggered by the government s knowledge of the fraud when the government does not intervene. The Supreme Court granted cert to review the U.S. Court of Appeals for the Eleventh Circuit s decision 2 in U.S. ex rel. Hunt v. Cochise Consultancy, Inc. The Eleventh Circuit reversed the Alabama district court, reviving the relator s complaint by giving the relator the benefit of the longer limitations period in 3731(b)(2). BACKGROUND At the center of the matter is the interplay between the two limitations periods in the FCA after which a civil action under section 3730 is time-barred: (1) 6 years after the date of an alleged violation; 3 or (2) 3 years after the date when material facts are known or reasonably should have been known by the official of the United States charged with responsibility to act in the circumstances, but in no more than 10 years after the date of the alleged violation. 4 The relator in Cochise Consultancy filed his claim more than six years after the alleged fraud occurred, but within three years of his disclosure of the fraud to Federal Bureau of Investigation agents who had interviewed him about his role in a separate kickback scheme, to which he ultimately pled guilty and served time in federal prison. * Sara N. Gerber is an associate at Blank Rome LLP concentrating her practice on government contracts and general litigation matters. She may be reached at sgerber@blankrome.com. 1 Parsons%20-%20Petition%20for%20Certiorari.pdf. 2 Id. 3 See 31 U.S.C. 3731(b)(1). 4 See 31 U.S.C. 3731(b)(2). 38

7 FCA STATUTE OF LIMITATIONS THE ELEVENTH CIRCUIT DECISION In reviving the relator s claim, the Eleventh Circuit held that a nonintervened action was a type of civil action brought under 31 U.S.C to which both limitations periods in the FCA applied. The court rejected the defendants argument that allowing a relator to file suit three years after the fraud is known by the government a nonparty to the action created an absurd result. The court reasoned that even in a non-intervened case, the government is the real party in interest, retaining control over the litigation and recovering the bulk of any damages, whereas the relator s role is that of a partial assignee of the government. In this unique context, the court held it was not absurd to apply a limitations period triggered by government knowledge. The Eleventh Circuit also considered whether a relator constitutes an official of the United States whose knowledge triggers the statute of limitations in 3731(b)(2). The court held that the language of the provision was plain and that the limitations period begins to run only when the government knew or reasonably should have known of the material facts concerning the fraud. The court stated that there was nothing in the statute to support the legal fiction that because a qui tam relator sues on behalf of the government, it becomes a government agent and the government official charged with responsibility to act. THE CIRCUIT SPLIT In granting the Cochise Consultancy defendants petition for certiorari, the Supreme Court implicitly recognized that the answer to the question of whether an FCA suit has been filed before the expiration of the statute of limitations now depends on the jurisdiction in which the case is filed. In the U.S. Courts of Appeals for the Fourth, Fifth, and Tenth Circuits, a relator must bring suit within six years of the alleged violation pursuant to 3731(b)(1), and may not rely on 3731(b)(2) in cases in which the government has not intervened. The U.S. Courts of Appeals for the Third, Ninth, and Eleventh Circuits permit a relator to rely on the limitations period in 3731(b)(2) in nonintervened cases. Unlike the Eleventh Circuit, the Third and Ninth Circuits consider a relator an official of the United States, whose knowledge of material facts triggers the running of the limitations period. THE PETITION FOR CERTIORARI The Cochise Consultancy defendants petition for certiorari provides the Supreme Court with a cogent preview of the arguments in favor of adhering to the Fourth, Fifth, and Tenth Circuit decisions. Among the most compelling are that: 39

8 GOVERNMENT CONTRACTING LAW REPORT (1) The text of 3731(b)(2) refers only to the United States and not to relators, indicating that Congress intended for it to apply only in cases in which the government has intervened; (2) The Supreme Court previously ruled in Graham County Soil & Water Conservation District v. United States ex rel. Wilson, 5 that the phrase a civil action brought under 31 U.S.C did not include FCA retaliation claims, and therefore, the phrase did not in fact cover all civil actions under the Act; (3) The statute of limitations in a non-intervened action would depend upon determining the knowledge of a nonparty to the action, an absurd result; and (4) If 3731(b)(2) applied in non-intervened actions, it is not clear when the six-year limitations period would apply, rendering it insignificant, if not superfluous. CONCLUSION Regardless of the outcome, the Supreme Court s review has practical implications for the 75 percent of FCA cases in which the government declines to intervene. It should provide a conclusive answer to whether a relator can rely on 3731(b)(2), and, if so, whether the cause of action accrues based on the relator s or the government s knowledge. The Supreme Court s decision will provide uniformity in the Circuits, reduce forum shopping, and give defendants a greater degree of predictability about whether FCA cases brought against them are timely U.S. 409 (2005). 40