• Ninth Circuit Holds That False Estimates in Federal Bids Are Actionable Under the False Claims Act
  • August 15, 2012 | Authors: Dennis J. Callahan; Aaron P. Silberman
  • Law Firm: Rogers Joseph O'Donnell A Professional Corporation - San Francisco Office
  • In a groundbreaking opinion, the United States Court of Appeals for the Ninth Circuit recently ruled that a bidder’s submission of a fraudulently low false estimate in a bid for a cost reimbursement contract may give rise to False Claims Act (“FCA”) liability. The opinion only denied the defendant’s summary judgment motion, so the plaintiff will still have to prove its case at trial. Nonetheless, the court’s extension of “fraud-in-theinducement” liability to this situation cautions bidders for cost-type contracts to review their estimating processes and methodologies to ensure that the assumptions underlying their bids are supportably within the bounds of sound business and engineering judgment.