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Real Property & Development Review

False Claims Act For Oregon

Posted in Construction

Construction contractors working on Oregon procurement projects beware (including general contractors, subcontractors and suppliers).  Oregon is on the verge of passing the state equivalent of the federal False Claims Act (31 USC 3729).

The Oregon bill essentially mimics the federal act, penalizing contractors who “knowingly” present false claims to the government.  This includes construction contractors who “exaggerate” their percentage completion on payment applications.  What qualifies as “knowing” has been debated ad nauseam in federal government contracts case law where Oregon courts will look for guidance as needed.

Note that “no harm, no foul” does not apply because a contractor triggers the violation upon submission of a problematic payment application.  No payment need be received from the agency.

Penalties are not as severe as under federal law … yet.  The bill addresses civil liability only.  That means company executives won’t go to jail, but fines of $10,000 per violation (for example, for each pay app) can add up quickly.