The False Claims Act (FCA) is one of the federal government’s most powerful tools for addressing fraud involving federal funds. When FCA cases arise in the context of federal contracts, one issue frequently becomes central to the litigation: materiality. Under the False Claims Act, materiality refers to whether an alleged misrepresentation or omission had a natural tendency to influence, or was capable of influencing, the government’s payment decision. See 31 U.S.C. § 3729(b)(4).
Courts frequently evaluate whether the government would have refused payment or taken corrective action had it known about the issue. Materiality is often the central issue in FCA litigation. In many False Claims Act cases, the key question is not simply whether a requirement was violated, but whether the alleged issue was material to the government’s payment decision. Below are three areas that frequently form the foundation of FCA materiality analysis and expert testimony.
- Context matters
Materiality may also depend on the procurement context surrounding the contract. Factors such as mission requirements, acquisition strategy, performance risks, and operational constraints may all influence how agencies evaluate contract performance issues. Understanding how materiality applies in government contracts can be critical for attorneys representing qui tam relators, whistleblowers, government agencies, and defendants in False Claims Act litigation. False Claims Act cases involving federal contracts frequently require expert testimony to explain the operational realities of the federal acquisition system, including:
- how federal procurement processes work
- how contracts are administered in practice
- how agencies evaluate compliance issues
- how alleged violations relate to payment decisions
Not every contract violation is material. Federal contracts contain many requirements, but not every deviation from a contract clause necessarily rises to the level of a False Claims Act violation. Materiality analysis focuses on whether the issue would meaningfully influence the government’s decision-making, rather than simply whether a requirement existed. The courts evaluating FCA allegations often need to understand both the legal elements of the FCA and how federal contracting works to better understand the ramifications of the alleged actions. Meaning: Do these actions matter? How much? And to whom? Law firms retain materiality expert witnesses to provide the court and jury with the perspective of government acquisition professionals and to explain how a defendant’s alleged actions or omissions were capable of influencing government acquisition decisions.
- Contract Administration Is Often a Key Factor
Federal contracts are administered through ongoing interactions between contractors and government officials. Contracting officers and program officials routinely address performance issues, documentation questions, and compliance concerns during the life of a contract. Understanding how contract administration works in practice can be critical when evaluating whether an issue would realistically affect payment decisions. Courts often examine how agencies actually behaved after learning of an alleged violation. Whether the government continued performance, continued payment, demanded corrective action, or treated the issue as significant can be highly relevant to the materiality analysis. These real-world practices can be important when analyzing materiality. In FCA cases involving federal contracts, documentation often plays a major role in evaluating materiality. Contract records, notes, and communication are valuable for illustrating how the contract functioned in practice. This can include:
- whether the government historically paid claims despite similar issues
- whether the agency continued performance after learning about the alleged violation
- whether the issue was treated as significant during contract administration
- invoices and payment requests
- correspondence between the contractor and government officials
- performance evaluations or contract administration records
3. The Federal Acquisition System Is Complex
Federal contracts operate within a structured procurement framework governed by the Federal Acquisition Regulation (FAR) and agency-specific rules. The FAR functions less like a single rulebook and more like an interconnected spiderweb of policies, procedures, and authorities. Rather than focusing on regulatory generalities, FCA cases typically require a focus on operational implications. This includes how specific FAR reforms affect competition, communication, acquisition strategy, and contract execution in federal contracts, and how those elements relate to the specific case. Rather than focusing on policy debates, materiality often requires a ground-level understanding of how government contracting functions in practice.
Understanding how these regulations interact with contract terms, performance oversight, and payment procedures often requires specialized expertise. Materiality helps the court (and the jury) to understand how these acquisition rules translate into operational systems within government contracting organizations.
Kevin Jans is a former Department of Defense Contracting Officer. He is now the President of Skyway Acquisition where he provides expert witness services focused on materiality in False Claims Act cases involving federal contracts. His experience in federal acquisition processes and government contracting operations provides valuable context for cases where contract structure and materiality are central issues.
