by Brian Mahany
There are three major laws that require public works projects to use American made products. Buy America, Buy American and the federal transportation funding laws require projects built with federal money to be built with U.S. made components. From steel to machinery, all of the components must be purchased here unless a specific exemption is granted.
The purpose of these laws is to preserve American jobs and stimulate American manufacturers. Congress has decided that U.S. tax dollars shouldn’t be spent on cheaper steel and machinery made in China, Vietnam or Argentina. Unfortunately, many contractors cut corners. That hurts American manufacturers and competitors who properly bid projects.
A recent investigation by the EPA’s Office of Inspector General claims the EPA doesn’t follow the law and allows vendors to easily obtain exemptions. In its defense, the EPA claimed their rules were “inartful” and sloppy, but not illegal. (Not much of a defense if you ask us.)
Many of the Buy America claims that are made come from whistleblowers; honest employees who know that their employer is cutting corners.
While it might seem like Buy America and Buy American violations are victimless crimes, that simply isn’t true. It’s not only American manufacturing businesses that suffer. Legitimate contractors suffer too. Contractors bid public works projects knowing they must use American components. A dishonest contractor, however, can use cheaper foreign made products and lower its bid price.
There is also a safety factor. If foreign materials such as Chinese steel are used and mislabeled, its hard to know if they meet the product safety specifications. Projects like bridges and high rise buildings are engineered to exacting standards. If foreign and untested components are used, there may be serious public safety risks.
Whistleblowers represent the front line in the fight against fraud. For claims involving foreign made goods, whistleblowers may include present or former employees of the contractor/ bidder, outside inspectors or even competitors.
The federal false claims act allows whistleblowers in Buy American and Buy America cases to collect a portion of any monies collected by the government. Because the law permits triple damages, cash awards can be substantial. Typically, the award paid to whistleblowers is 20 to 25% of the amount recovered on behalf of the government.
Whistleblowers play an important role in assuring that public projects are built with U.S. made products. Unfortunately, when a federal agency such as the E.P.A. gets sloppy, everyone suffers. (The EPA says with over 3300 projects in the last several years, it is simply too late to go back and investigate.)
If you know of a contractor or vendor using mislabeled, inferior or foreign made materials in a public works or transportation project, give us a call. We represent whistleblowers in a wide variety of false claims violations. For more information, contact attorney Brian Mahany at or by telephone at (direct). All inquiries are protected by the attorney client privilege and kept in strict confidence.
Mahany & Ertl – America’s Fraud Lawyers. Offices in Milwaukee, Wisconsin; Detroit, Michigan; Minneapolis, Minnesota; Portland, Maine and San Francisco, California. Services available in many jurisdictions.
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