Introduction
On April 29, Aerojet Rocketdyne Holdings Inc. (Aerojet) settled claims by whistleblower Brain Markus for a reported $9 million after the second day of a jury trial.[1] This is the second recent settlement under the False Claims Act (FCA) relating to alleged misrepresentations about a company’s cybersecurity practices and systems in connection with government contracts. We recently covered the settlement between the Department of Justice (DOJ) and Comprehensive Health Services here. These two recent settlements highlight a growing trend to use the FCA as a mechanism to hold vendors that do business with the federal government accountable for meeting federal cybersecurity requirements.
This is a wake-up call to all federal government contractors. In the Aerojet case, the company’s senior director of cybersecurity, compliance, and controls used his intimate knowledge of the company to bring challenging accusations to public light. Because the threat to a company in such cases may come from within, companies must ensure that compliance is a priority and evaluate governance structures to be prepared to act efficiently to meet compliance objectives before it is too late.
The False Claims Act
Under the FCA, a person or business is liable for knowingly submitting false claims to the government or submitting false records or statements to the government to get the false claim paid. 31 U.S.C. §§ 3729(a)(1)(A) and (B). In the context of the FCA, a “claim” is a demand...
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