Government Contractor Ordered to Pay $1.66 Million in Damages for Violation of the False Claims Act
Circle C Construction, LLC (Circle C) was ordered yesterday to pay the United States $1,661,423.13 as treble damages for breaching its agreement to abide by the Davis-Bacon Act requirements to pay electricians agreed-upon wages in constructing buildings at the Fort Campbell Army base, in violation of the federal False Claims Act.
In October 2008,The United States filed a lawsuit against Circle C and its electrical subcontractor, Phase Tech, LLC, (Phase Tech) alleging that Circle C filed false payroll certifications with the government that failed to disclose Phase Tech as a subcontractor; failed to identify any of its employees, as required by federal law and the contract’s terms, and falsely certified that Circle C and its agents were paying the prevailing wages to employees that were required by the contract. The case against Phase Tech was settled in June 2009, in which Phase Tech agreed to pay $15,000.00 in damages.
The United States Attorney’s Office will vigorously pursue allegations that government contractors have not dealt fairly with the United States and its agencies,” said U.S. Attorney Ed Yarbrough. “Moreover, businesses that contract with the government to pay prevailing wages to employees and contractors on government projects will be held to the letter of their agreement in order to protect local wage standards for the benefit of local workers.”
In granting judgment for the United States, United States District Judge William J. Haynes, Jr., found that Circle C, a company that has held government contracts for nearly twenty years, contracted with the Army to construct buildings at Fort Campbell, and agreed to pay its electrical workers a base hourly rate of $19.19 plus fringe benefits of $3.94 per hour. Throughout the relevant time period, Circle C only paid electricians between $12 and $16 per hour for their work at Fort Campbell. Circle C also agreed to submit complete and accurate payroll certifications to Fort Campbell as a condition of payment. Although Circle C submitted payroll certifications for its employees and for other subcontractors, it did not submit certifications for its electrical subcontractor, Phase Tech. After the lawsuit was filed, Circle C submitted payroll certifications to the Army for Phase Tech, but did not verify them and they contained inaccuracies.
The investigation was conducted by special agents of the United States Department of Labor. The United States was represented by Assistant United States Attorney Ellen Bowden McIntyre.
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