The U.S. Court of Appeals for the Sixth Circuit recently affirmed a decision that a federal contractor violated the Federal Civil False Claims Act when its subcontractor failed to pay prevailing wages to its employees. In United States v. Circle C Construction, L.L.C., 2012 U.S. App. LEXIS 20433 (6th Cir. 2012), the United States brought a False Claim Act suit against Circle C Construction Company, a general contractor for the U.S. Army for construction of buildings at Fort Campbell.
Circle C’s contract with the Army required payment of Davis Bacon Act prevailing wages and required that Circle C and its subcontractors submit payroll records certifying that prevailing wages were paid. The prevailing wage rate for electricians was $19.19 per hour and fringe benefits of $3.94 per hour. Circle C subcontracted with Phase Tech to perform electrical work on the project. A Department of Labor investigation revealed that Phase Tech failed to pay prevailing wages. Nevertheless, Circle C’s payroll certifications to the Army stated that the certifications were complete when in fact no Phase Tech employees who worked on the project were listed and the certifications wrongly represented that the prevailing wages were paid to all subcontract employees.
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