Pursuant 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 email@example.com.