VB CGC Practice Group

VB CGC Practice Group
Vandeventer Black's Construction and Government Contracts Practice Group focuses on serving our business clients in the construction industry. We currently have offices in Norfolk and Richmond, VA, the OBX and Raleigh, NC, and Hamburg, Germany. For more information about Vandeventer Black, clink on the VB logo.

Monday, October 29, 2012

Kickbacks Lead to 87 Months

One would think kickbacks were a sad thing of the past, but the U.S. District Court for the District of Columbia recently sentenced a contracting executive to 87 months in prison and to pay more than $9.4 million in restitution in U.S. v. Kahn, D.D.C., No. 1:11-cr-00276, sentencing 10/18/12). The executive pled guilty to one count of bribery of a public official and one count of paying unlawful kickbacks, admitting that he stole over $9 million by submitting invoices to the Army Corps for services that were not performed. The overall scheme was apparently much larger; involving more than $30 million in bribes and kickbacks, including steered contracts. Two other conspirators also received prison terms, and were ordered to almost $11 million in restitution, and the investigation is still ongoing (thus far 12 people have pled guilty and the government has seized over $7 million from them). It's a sad reminder that the federal government will not tolerate such illegal activities (nor certainly should it), and of the large and sharpe teeth available to the federal government to deal with potential government contracting lawbreakers.

Friday, October 5, 2012

Constructively Debarred Contractor Allowed to Proceed with Claims for De Facto Debarment and Contractual Interference

Ever think a government officially was unofficially blackballing you? Sebastian Phillips and his company, Marine Design Dynamics, felt so and filed suit in the U.S. District Court for the District of Columbia (Phillips v. Mabus, D.D.C. No. 11-2021) seeking money damages for de facto debarment and interference with contract after they felt the Navy systematically stopped giving them work. The government defendants moved to dismiss on various grounds, but the court overruled the motion to dismiss based on the complaints' allegations that: 1) Navy officials stated that Phillips and MDD would not receive future work; 2) the Navy's conduct amounted to a systematic effort to preclude MDD from future contracting; and 3) plaintiffs were de facto debarred because of fraudulent rumors of overbilling by plaintiffs started by key employees that left MDD to work for a competitor firm. Whether plaintiffs can prove their claims remains to be seen, but the claims have been allowed to proceed for now. Judge Sullivan's memorandum opinion (9/30/12) is an interesting read for anyone who feels in similar circumstances, and is a decision regarding which government officials should take heed.

Monday, October 1, 2012

E-Verify Program Extended to September 30, 2015

On September 28, 2012, President Obama signed into law, S.3245 reauthorizing and extending the E-Verify immigration program for more three years to September 30, 2015. The program was set to expire September 30. Initially a voluntary program, E-Verify is now mandatory for federal contractors and some employers in some states.  A link to the law follows: