Senate Bill 5144, known as the False Claims Act, is vigourlusly opposed by AGC. The legislation says that a person who knowingly presents, or assists in the presentation of, a false or fraudulent claim that results in losses to a state or local government entity of at least $1,000 is liable for a civil penalty of between $5,000 and $10,000 plus treble damages, attorney fees and costs. Plus, a third party may initiate action on the government's behalf.
Douglas Roach, of counsel with Ahlers & Cressman and a member of AGC's Legal Affairs Committee, testified before the Senate Judiciary Committee with Van Collins, AGC's Legislative Counsel.
Among the arguments made by Roach and Collins is the fact that Washington State, due to the Mike M. Johnson case, has the most restrictive notice requirements in the nation. There are jurisdictions where a contractor needs to submit a fully developed claim with pricing within five days, an insufficient amount of time to obtain precise information from subcontractors and suppliers. Sometimes the claims, therefore, include good-faith estimates - but this could trip a "false claim" accusation by a third party under SB 5144. Conversely, if a contractor took the time needed to secure precise information, it could end up waiving claim rights.
"Clearly, this bill would cast a long and gloomy shadow over public works contracting which does not need to be there in these difficult economic times," said Collins. "Public owners and contractors should be encouraged to work in partnership for the betterment of projects rather than forced into a ‘gotcha' mindset."
SB 5144 is sponsored by Senators Kline, Rockefeller and Pridemore.
For questions or comments about the measure, contact Van Collins at 360-352-5000.