Later this year we hope to see two False Claims Act lawsuits (whistleblower cases) unsealed by the federal courts. Both involve claims of contractors illegally passing off foreign made goods as U.S. made. Most whistleblower claims involve Medicare fraud or defense contractors. We don’t see many cases involving Buy America or Buy American Act violations but they exist.
Since the Great Depression in 1933, Congress has declared that when tax dollars are involved, companies should give preference to goods made in the United States. Since then, there have been a series of additional laws all giving similar preferences for contracts involving Indian healthcare, military goods and water pollution facilities. The public may never have heard of some of these obscure laws but government contractors and vendors know about them.
Last year, Jett Industries was ordered to pay $500,000 after it was learned that the company was using non U.S. components in a wastewater facility. The EPA had awarded federal funds to the Village of Briarcliff Manor, New York. The town needed a new water pumping station and Jett Industries was awarded the contract. Because federal funds were used, Jett had to comply with the Buy American Act and American Recovery and Reinvestment Act. These laws both require steel components to be made in the United States unless a waiver was granted. Waivers can be issued if a component is not made here or is exorbitantly priced.
Jett obtained a steel bladder surge tank from France and then created a false “made in the U.S.A.” certification, which was later forwarded to the village. Because a Jett employee had to manually create a forge certification, there can be no argument that the use of an imported component was accidental.
Dishonest companies sometimes bid a project by claiming that all products are made in the United States but then try to line their pockets by substituting cheaper or inferior imported goods. Even if the tank was of the same quality, taxpayers were still deceived and the E.P.A. lost the ability to assist our domestic manufacturing industry.
In announcing the settlement, Albany’s U.S. Attorney said,
“Protecting taxpayer dollars is one of our core priorities. Companies that do business with the government must do so honestly, or suffer the consequences. The Recovery Act was designed to stimulate our Nation’s economy in the wake of an economic crisis unlike any since the Great Depression, and we will continue to pursue vigilantly those who misuse funds designated for that purpose. With today’s settlement, Jett has accepted responsibility for its misconduct and has agreed to fix a problem it alone created.”
Most Buy American Act cases are brought to light by whistleblowers, heroes who take a stand against greed and corporate fraud. Although this case was quite small, the victory is still important. Whistleblowers play an important role in keeping contracting fair and honest. They level the playing field for honest vendors and save taxpayers billions of dollars each year.
The False Claims Act also allows whistleblowers in Buy America and Buy American Act cases to be awarded up to 30% of whatever is collected by the government.
Thinking about becoming a whistleblower? Call us. To obtain an award you must have a lawyer and must file a lawsuit on federal court. Whistleblower cases are handled on a contingent fee basis meaning you are never out of pocket for any money unless there is a recovery. Visit our Buy America information page or contact the author of this post. Brian Mahany can be reached at or by telephone at (414) 704-6731 (direct).
MahanyLaw – America’s Whistleblower Lawyers