The Department of Justice announced yesterday that a contractor from Wisconsin has agreed to plead guilty and pay $3 million to settle civil and criminal charges involving product substitution and a whistleblower in the case gets a $400 thousand payday.
The contractor specializes in the design and construction of glass space frames used in roofs and atrium enclosures. However, on one particular contract, instead of using domestically produced materials required by the "Buy American Act", the company bought foreign materials, repackaged them, and falsified documents to hide the fact it was using foreign materials.
Domestic preference statutes are designed to promote American businesses and to protect U.S. economic interests. Unfortunately, it also tends to increase construction costs but that is the price the Government is willing to pay to accomplish its objectives. When companies subvert such requirements, the objectives of the Laws (i.e. protection of U.S. economic interests) are thwarted while the savings do little more than line contractors' pocketbooks.
Not only will the contractor pay a lot of money to settle the charges, as part of the settlement, it agreed to not contest debarment from pursuing future Government contracts.
The allegations were brought by a whistle-blower who will now share in the recovery. Whistle-blowing has become huge cottage industry. Google "whistle blower" and "attorney" and there will be dozens of firms willing to take a case.
You can read the full DoJ press release by clicking here.
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