Circuit Court Affirms Contractor’s Right to Rely on TAA Certifications

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MB900310602Pursuant to the False Claims Act (FCA) it was alleged that a contractor sold the government goods that did not comply with the Trade Agreements Act, (TAA).  The TAA forbids the government from acquiring goods produced in certain countries.  This particular contractor had obtained TAA certifications from its suppliers.  The contractor had also been told by GSA during a contractor assistance visit that they were TAA compliant.  The court ruled that it was irrelevant whether the goods were TAA compliant or not because the contractor has a right to “reasonably” rely on the supplier certifications.  The Court’s decision may be found here.

This is a rare FCA victory for contractors as most recent court decisions have found contractors to be liable based on an ever-expanding view of the FCA’s reach.  However, the key phrase in this decision is “reasonably rely.”  Despite the TAA compliant certifications, this ruling could easily have gone the other way had there been any facts or circumstances that should have made the contractor aware or at least suspicious that the goods were not TAA compliant.  The bottom line is that TAA compliance certifications may be relied upon in good faith but will not necessarily protect a contractor that if, under the specific facts, it was not reasonable to rely on them.

If you have any questions regarding this topic or other contract administration issues, please contact Tom Marcinko at 301.231.6237 or via email at tmarcinko@aronsonllc.com.

 

About Thomas Marcinko


Thomas Marcinko is a Principal Consultant in Aronson’s Government Contract Services Group. He has over 25 years of government contracts experience, including proposal development, contract and subcontract administration, FAR compliance, small business programs, and government audits.

One thought on “Circuit Court Affirms Contractor’s Right to Rely on TAA Certifications

  1. […] And, in a bit of FCA news that isn’t limited to subcontracts or subcontractors … The D.C. Circuit Court recently issued a ruling in UNITED STATES of America, ex rel. Brady FOLLIARD, Appellant v. GOVERNMENT ACQUISITIONS, INC. and Govplace, Appellees that affirms a contractor’s right to rely on Trade Agreements Act (TAA) certifications: “The TAA forbids the government from acquiring goods produced in certain countries.  This particular contractor had obtained TAA certifications from its suppliers.  The contractor had also been told by GSA during a contractor assistance visit that they were TAA compliant.  The court ruled that it was irrelevant whether the goods were TAA compliant or not because the contractor has a right to “reasonably” rely on the supplier certifications.” [Aronson Blog] […]

    September 22, 2014 at 10:18 pm

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