On May 7, 2019, the US Department of Justice (DOJ) announced new guidelines for awarding credit to contractors or individuals who voluntarily disclose False Claims Act (FCA)−related misconduct, actively cooperate with the DOJ on FCA investigations, or take effective remedial measures to mitigate or rectify FCA-related misconduct. The release represents the first formally published guidance from the DOJ on the guidelines it will consider in awarding cooperation credit. Assistant Attorney General Jody Hunt stated, “False Claims Act defendants may merit a more favorable resolution by providing meaningful assistance to the Department of Justice – from voluntary disclosure, which is the most valuable form of cooperation, to various other efforts, including the sharing of information gleaned from an internal investigation and taking remedial steps through new or improved compliance programs.”[1]
Though the guidelines do not explicitly discuss or categorize the credit afforded to cooperating contractors, they represent the first memorialized guidelines and steps contractors can take to potentially lessen penalties and damages in an FCA actions. The guidelines are located in the Justice Manual, Section 4-4.112.
The guidelines state, “Entities or individuals that make proactive, timely, and voluntary self-disclosure to the Department about misconduct will receive credit during resolution of a FCA case.” Other examples of cooperation with government investigations include identifying individuals responsible for the misconduct, disclosing relevant facts relevant to the government’s investigation, and preserving and collecting pertinent documents and other evidence related to the alleged misconduct.
For remedial measures taken by the contractor or individual, the government will consider “a thorough analysis of the cause of the underlying conduct,” whether a contractor implemented or improved an effective compliance program, and whether appropriate disciplinary actions were taken against those responsible for the misconduct, among other steps.
Impact on Contractors and Individuals
These guidelines provide greater clarity and specifics on the types of conduct the DOJ values related to FCA actions and describe, more explicitly than any prior guidance, the credit the DOJ is prepared to grant. Though the DOJ will retain discretion when awarding credit to contractors and individuals, these new guidelines offer a roadmap for contractors looking to reduce penalties and damages in FCA actions.
[1] DOJ, Department of Justice Issues Guidance on False Claims Act Matters and Updates Justice Manual (May 7, 2019), available at: https://www.justice.gov/opa/pr/department-justice-issues-guidance-false-claims-act-matters-and-updates-justice-manual
