U.S. Government GSA Contract Term Violations

Companies that supply goods and services to the federal government may be liable under the False Claims Act if they falsely certify that they are complying with government contract terms in their Multiple Award Schedule (”MAS”) contracts with the General Services Administration. MAS contracts differ from commercial contracts in three major ways: they contain what are known as “defective pricing” and “price reduction” requirements, as well as a requirement to comply with the U.S. Trade Agreements Act.

U.S. Trade Agreements Act Compliance

As part of MAS contracts, contractors must certify that they have complied with the U.S. Trade Agreements Act. This means vendors may only sell to the government products that are made (or “substantially transformed,” as stated in the law) in “eligible” countries, i.e. those that have reciprocal trade agreements with the U.S.

Eligible countries include Canada, Mexico, England, France, and Japan. Countries that aren’t eligible include China, Taiwan, Malaysia, and South Africa.

As a result of a qui tam (whistleblower) lawsuit brought under the False Claims Act, five companies have paid the federal government a total of $30 million to settle allegations.