Recent False Claims Act cases a caution to gov’t contractors that skimp on security
Two FCA cases unsealed in 2019 show that contractors can face multi-million-dollar penalties if they don’t comply with federal government cybersecurity requirements.
The False Claims Act (FCA), otherwise known as the “Lincoln Law,” can cost companies that supply goods or services to the federal government millions of dollars if they fail to provide the digital security protections they promise, as two recent cases illustrate. In one of the cases, Cisco Systems was forced to pay millions of dollars to the federal and state governments.
First passed in 1863 during the Lincoln Administration, the FCA was aimed at fraudulent contractors who sold bad horses, provisions and munitions to the Union Army. One of the law’s provisions allows for citizen “relators” or whistleblowers to be paid a percentage of what can be recovered from those who are proved to have made false claims to the federal government in the sale of goods or services.
Between the Civil War and the mid-1980s, the FCA was little used until it was given a shot in the arm by Congress in 1986 to deal with rampant problems involving defense contractors. The FCA was revised again by Congress in 2009 and 2010.[This article appeared in CSO Online. To read the rest of the article please visit here.]