The Ninth Circuit issued an opinion last week in which it held that knowingly making "false estimates" in connection with a bid for a government contract may be actionable under the False Claims Act ("FCA"), 31 U.S.C. §§3729 et seq. United States ex rel. Hooper v. Lockheed Martin Corp., No. 11-55278 (9th Cir. Aug. 2, 2012).
The FCA allows private citizen "relators" to file suit on behalf of the government to recover damages from persons who file false claims for government funds. Nyle Hooper worked at Lockheed Martin as the Senior Project Engineer assigned to the U.S. Air Force Range Standardization and Automation ("RSA") IIA program, which managed the hardware and software supporting launch operations at Vandenberg Air Force Base and Cape Kennedy. He alleged that he was terminated by Lockheed Martin because he was investigating fraudulent activity surrounding Lockheed's RSA IIA bid. In particular, Hooper charged that Lockheed violated the FCA by, among other things, purposefully underbidding the contract.
The RSA IIA contract is a cost plus award fee contract, under which the contractor is reimbursed for costs incurred, and paid periodic award fees based on performance. Lockheed bid the effort for $432.7 million, but has since been paid over $900...
