In this Issue

Government

Counting Employees for HUBZone Purposes: The Clear Line of Fractured Standard

Certification in SBA’s1 HUBZone Program requires firms, among other things, to meet two employee- based conditions. So, to ensure compliance, a firm must first grasp how SBA counts “employees.” In addition, an applicant firm must also realize that, in some cases, SBA will count the employees of its affiliates (for size purposes under SBA’s regulations)2 as if they were the applicant firm’s own employees. Indeed, SBA, using the totality of the circumstances, will aggregate a firm’s employees with its affiliate’s employees unless a clear line of fracture separates the two.

Federal Government

Equitable Adjustments for Volunteered Contractor Performance: Confusion about the Burden of Proof

Where the government, in defending a claim for an equitable adjustment, argues the contractor acted as a volunteer, I always thought the contractor simply had the burden of proof to show otherwise. As it turns out, this issue is more nuanced and there are conflicting approaches within the Federal Circuit and in its lower tribunals. To date, no court or board has remarked upon the split of authority or suggested a resolution of the precedents. This article will cover the following topics: the meaning of volunteered contractor effort; relation of the Anti-Deficiency Act; the strict and lenient approaches to volunteered contractor performance; “burden of proof” and “rebuttable presumption” explained; and the flaws in the lenient approach.

Federal Government

Imputation of False Claims Act Liability to Prime Contractors

The specter of the civil False Claims Act (FCA) is, by now, well known to companies doing business with the federal government. The FCA creates liability for any entity that “knowingly presents, or causes to be presented, a false or fraudulent claim for payment or approval,” or that “knowingly makes, uses, or causes to be made or used, a false record or statement material to a false or fraudulent claim.”1 In Fiscal Year 2018, the U.S. Department of Justice recovered over $2.8 billion in FCA matters, including over $107 million from the defense industry.2