U.S. regulations require projects built with federal dollars to be built with American made steel. Every piece of steel made in the U.S. or imported here comes with a certification. Not only does that document indicate where the steel was made or “rolled,” it describes the characteristics of the metal. When we think of steel, we think of a fungible product but it’s not. The quality of steel and its chemical composition varies greatly. This is especially true with foreign steel.
Congress passed the Buy America and Buy American acts primarily to preserve American jobs. These laws say that all publically funded projects use steel made in America. (State projects funded solely with toll monies are probably exempt.) Cheaper steel is available from China and Turkey but lawmakers want projects built with tax dollars to use high quality, American made components.
Two years ago, we successfully brought a whistleblower case under the False Claims Act involving imported steel. Novum Structures was fined $2.5 million for lying about the origin of steel used in several government products. (The whistleblower in that case was awarded $400,000 for her information.)
Since then we have brought other foreign steel cases. Those actions remain under seal while being investigated by prosecutors and law enforcement.
Most foreign steel cases are economic crimes. A government agency specifies American made steel but receives a cheap substitute. Some cases, however, involve significant public safety risks.
As noted above, steel varies greatly in tensile strength and corrosion resistance. Therefore, engineers and architects are very specific in detailing the type and quality of materials needed. If a company substitutes cheap foreign steel, the safety of the project could be jeopardized.
Boston’s “Big Dig” saw metal fasteners fail causing a concrete tunnel panel to fall. One of those panels crushed a motorist to death. Engineers are presently struggling with possibly defective cable structures on the new Oakland Bay Bridge in San Francisco.
Bad Steel Used in French Nuclear Reactors?
The Economist reports that France’s quasi-public electricity utility, Electricite´de France (EDF) is facing a crisis over bad reactor parts. So many nuclear reactors are down that the company is in a crisis. One prolonged cold spell could cause blackouts for millions of customers.
What is the source of the problem? Media reports say poor quality reactor parts. Regulators believe the steel used in these parts has 50% more carbon that was specified by designers. High carbon could cause the reactors suddenly fail. Does the company risk a nuclear disaster or let people freeze in the winter? That question could have been avoided if proper quality steel was used in the reactors.
EDF’s reactor parts were made by Creusot Forge. Creusot is owned by a French company and Japanese casting company. French officials are now scrambling to determine who is responsible. That doesn’t fix the problem, however.
Whistleblower Awards for Defective and Imported Steel
The Buy America and Buy American laws obviously don’t apply in France. The problems faced by the French highlight a major problem in the U.S, however. Buildings, bridges, railroads… many government funded projects in the U.S. are being made illegally. Contractors or their subs break the law if they substitute materials and use lower quality and imported steel. Until an accident occurs, however, it is difficult for regulators to even know about the defects.
In 1863, Congress and President Abraham Lincoln passed the federal False Claims Act. That law empowers whistleblowers with information about fraud to bring claims on behalf of the government and earn awards. Under the Act, a whistleblower with inside knowledge of defective or foreign steel could receive a large cash award. The typical award is 15% of what the government collects from the wrongdoer. 30% awards are available if the whistleblower’s lawyers prosecute the case.
We encourage those with inside information about steel substitution or false certificates of rolling to call us. Our whistleblower clients have received over $100 million in awards in recent years. The next award could be yours.
Consultations are Confidential and without Obligation
All inquiries are protected by the attorney – client privilege and kept strictly confidential. And we never charge for our services unless we recover money on your behalf. For more information, visit our government contracting fraud and Buy America pages . Want to speak to someone today? Contact attorney Brian Mahany at or by telephone at (414) 704-6731 (direct).
MahanyLaw – America’s Whistleblower Lawyers
March 2018: Read our new post on foreign steel.