October 4, 2022. The United States Department of Justice settled a case against a Boulder, Colorado-based scientific instrument technology company for falsely certifying compliance with the Buy American Act on its government contracts and therefore submitting false claims to the government. Under the terms of the settlement, Instec paid $635,000. For reporting their concerns about the scientific instrument technology company’s contracting practices, the whistleblower will receive $124,500, almost 20% of the settlement. The whistleblower, or qui tam relator, was a former employee of the company.
Under the Buy American Act, at the time of the whistleblower’s initial complaint companies in contracts to sell goods to the government had to certify that products met a two-part test. As summed up in the settlement agreement, to be considered compliant with the Buy American Act, contracts must certify: “(i) the end product was manufactured in the United States; and (ii) at least 50% of the cost of the components were of U.S. origin.” Both the Federal Acquisition Regulation (FAR) and Defense Federal Acquisition Regulation Supplement (DFARS) require that companies doing business with the government certify that their products pass the test, if they are to comply with the Buy American Act. The whistleblower alleged that Instec and its owner and president, Dr. Zou, falsely certified that foreign-made products were in fact manufactured in the U.S. of components of at least 50% U.S. origin.
The Buy American Act “promotes American businesses and protects U.S. economic interests,” as the Assistant Inspector General for Investigations for the NASA Office of Inspector General stated. It encourages contractors to use American materials and domestic manufacturing facilities, unless it is cost-prohibitive to do so. In 2021, the Biden-Harris Administration launched a Made in America Office to “scrutinize and reduce waivers to Made-in-America laws.” Whistleblowers, take note that this is an area of increased focus for this administration.
The federal government spent about $637 billion on contracts in Fiscal Year 2021. The False Claims Act empowers whistleblowers to be rewarded for letting the government know when those funds are not being spent appropriately.
If you would like to report government contractor fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.