SUPREME COURT SAYS WHEN YOU INVOICE, YOU CERTIFY

The Supreme Court ruled recently that contractors are implying certification with their compliance on a host of contract rules when they submit an invoice for payment. In Universal Health Services, Inc. v. U.S. ex rel. Escobar the court affirmed the idea that liability can be triggered without an express certification and regardless of whether the noncompliance matter concerned an explicit condition of payment. This means that companies are affirming that they are in compliance with all contract terms and conditions each and every time they submit an invoice. The message is clear: the government, including the courts, expects you to be in compliance before you ask to be paid. Contractors need to understand this ruling and what it means. The compliance community – IG’s, DCAA, etc., now have Supreme Court affirmation that a wide array of potential non-compliance issues could trigger False Claims Act problems if companies fail to pay attention. This is a powerful reminder of one way in which federal business differs from commercial. It’s not enough to have a happy customer, supply good pricing, and provide good performance. Companies must understand, and follow, the terms and conditions within their contracts. Similarly, you will be paying the government back if you don’t take the necessary compliance steps and get audited. The firm of Sheppard Mullin Richter and Hampton has put together a handy blog post for greater understanding of this issue. See it here