DOJ Intervenes In FCA Suit Against Subcontractor That Allegedly Failed to Comply With Specifications
A recently unsealed False Claims Act case in Maine alleges a roof contractor knowingly failed to use materials that complied with the prime contracts for renovation of government buildings. According to the complaint filed by the United States in Emery v. Roof Systems of Maine Inc., 2:14-cv-00483-DBH (D. Me.), Roof Systems of Maine worked as a subcontractor at a National Guard installation at the former Brunswick Naval Air Station, the Navy’s Cutler Power Plant, and the Navy’s Portsmouth Naval Shipyard. But, the government alleges Roof Systems sought payment from general contractors despite not complying with contractual specifications.
First, the United States contends that at the National Guard installation, Roof Systems was required to install metal roof and wall panels specially fabricated to fit together without modification. Instead, Roof Systems allegedly modified panels and failed to use proper sealant in order to meet project deadlines. Second, at the Cutler Power Plant, the United States has accused Roof Systems of using a thinner, cheaper wall panel stock that did not comply with contractual requirements. As a result, the United States complains that water infiltration occurs during wind-driven rain events, which are common to the region. Third, Roof Systems contracted to restore copper framed skylights and replace a decorative copper cornice at the Portsmouth Naval Shipyard. The United States asserts Roof Systems used carbon steel screws to fasten copper, instead of fasteners compatible with copper as the prime contract required. The carbon steel fasteners are inappropriate for use in close proximity to the ocean, which the United States asserts will cause safety and structural issues unless remedied.
Throughout these projects, the United States claims Roof Systems’ employees knew their actions did not comply with the contracts but concealed that fact from the prime contractors. The United States quotes from emails in which Roof Systems’ project manager allegedly concedes that he allowed “some decisions … that I should not have.” The government also alleges Roof Systems concealed its use of the cheaper panel wall stock by submitting invoices for the more expensive stock required by the prime contract.
Roof Systems has not responded to the suit, and the allegations remain unproven, but the federal government’s intervention and interest in the case illustrates the high stakes of government construction contracts, including for suppliers and subcontractors. It would be a rare case in which a contractor performing work on a private project would be liable for treble damages and penalties as the False Claims Act permits the government to recover, even if the contractor knowingly flouted the private project’s contractual requirements. Further, because prime contract terms are not always even shared with subcontractors and suppliers, this suit underscores the compliance challenge that such contractors have when their goods and services are utilized downstream by the government.