The Department of Justice announced recently that a U.S. company has agreed to pay nearly $2.1 million to resolve False Claims Act allegations that it failed to comply with the requirements of the Buy American Act, the Trade Agreements Act, and the Berry Amendment when selling textile-based products to the Department of Defense.
The BAA creates a preference for domestic products when the federal government purchases supplies. The Berry Amendment requires certain items purchased by the DoD to be 100 percent domestic in origin and mandates a higher level of domestic content than the BAA. The TAA governs trade agreements between the U.S. and foreign countries and limits certain U.S. government procurement to U.S.-made products or products made in designated countries.
According to the DOJ, court documents allege that since at least 2008 the company submitted false claims in connection with the sale of “American-made” products that were actually manufactured in foreign countries, including Peru, Mexico, and China. The company marketed its goods as “100% made in America” and replaced the original foreign manufacturers’ tags with tags that read “Made in USA.” The company also offered its products for sale to all federal agencies on a website that permits them to purchase products from contracted vendors.
The DOJ states that this civil settlement includes the resolution of claims brought by a company employee under the qui tam provisions of the FCA, which allow a private party to file an action on behalf of the U.S. and receive a portion of any recovery.
For more information on Buy American requirements and how to ensure your company is in compliance, please contact attorneys Mark Segrist, Mark Tallo, or Josh Rodman.
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