PROTECTING SMALL BUSINESS, PROMOTING ENTREPRENEURSHIP

Senate Judiciary Committee Letter on the “False Claims Amendments Act,” S.2428

By at 22 October, 2021, 12:09 pm

Senate Judiciary Committee

United States Senate

Washington, D.C. 20510

 

Dear Senator:

On behalf of the Small Business & Entrepreneurship Council (SBE Council), I am writing to express our organization’s concerns regarding S. 2428, the “False Claims Amendments Act of 2021.”  SBE Council firmly believes in upholding the integrity of federal procurement programs and that taxpayer dollars be protected from fraudulent actors. However, we are concerned that S. 2428 would create unintended consequences and big problems for small businesses by unfairly imposing costs, burdens and inequities upon them, especially if they are an innocent party that gets swept into a “qui tam” complaint.

Similar to the problem of excessive and lengthy litigation in our country, where many businesses “settle” rather than endure the significant costs of fighting a lawsuit – even when innocent, the False Claims Act has its problems that could worsen under S. 2428.

Lowering the burden of proof for the government and the evidentiary standards for materiality, as would be the case under S.2428, and compelling defendants to pay the government’s costs of producing information that may be required to prove their innocence under the new legal threshold, would bestow significant hardships upon small businesses. As you are well aware, small businesses often lack the resources to bring in sophisticated legal help, which certainly would be needed if they are hit with a FCA suit or claim, and under the changes proposed by S.2428. Moreover, many of the unfair changes proposed by S.2428 would be retroactive.

SBE Council urges a full exploration and hearing of S.2428’s impact, and if it is voted upon “as is” we urge you to oppose the legislation. Thank you for your consideration of our views, and please feel free to contact SBE Council if you have questions.

Sincerely,

Karen Kerrigan, President & CEO

 

 

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