August 20, 2025
This article was featured in the September 2025 edition of the Utility Contractors Association of New England, Inc.’s Construction Outlook.
In July of 2025, the United States Department of Justice (“DOJ”) announced that it had reached a $4 million settlement resolving False Claims Act allegations against a Canadian-based environmental engineering firm (the “Company”) and a separate company that it had acquired (the “Separate Company”). According to the DOJ, the Company and the Separate Company violated the False Claims Act by submitting applications for Brownfields Assessment Grants to the Environmental Protection Agency (“EPA”) that included false certifications that they had complied with federal procurement regulations.
By way of background, the “EPA Brownfields Grant Program provides grants and technical assistance to cities, towns, and other municipalities to assess, safely clean up, and sustainably reuse contaminated properties.”
According to Acting EPA Inspector General, “[f]air competition is critical to the integrity of the program…” Importantly here, those seeking to apply for EPA Brownfields Grants are required to certify that any “contractors that develop or draft specifications, requirements, statements of work, or invitations for bids must be excluded from competing on those procurements.”
In this particular case, the DOJ alleged that for an 8-year period spanning from 2014-2022, the Company — through a subsidiary — and the Separate Company “drafted or assisted in the drafting of requests for proposals and statements of work associated with applications for EPA Brownfields Assessment Grants.” However, they “then competed for and won the work for which they had drafted the specifications.” In so doing, the DOJ alleged, the two companies not only violated the prohibition against competing on these procurements, given their involvement in the development of the specifications and statements of work, but they also violated the False Claims Act by falsely certifying compliance.
Although the two companies denied liability, they ultimately agreed to make a settlement payment of $4 million, $2,666,666.67 of which comprised restitution. The Acting EPA Inspector General stated that her office “will vigorously pursue allegations of false certifications to protect both the program and the taxpayer dollars that fund it.”
While this case arose in the specific context of the EPA Brownfields Grant Program, it illustrates conflict of interest risks that can arise in various procurement contexts. For example, the Massachusetts Conflict of Interest Statutes — M.G.L. c. 268A, § 1(q) — provides that “no contractor or personnel shall directly or indirectly bid on or be awarded a contract for any construction project if they have participated in the engineering or environmental analysis thereof.” This prohibition may not pose an issue for contractors that do not perform engineering or environmental analysis work for awarding authorities. However, the risk of a conflict of interest can arise when contractors engage in this type of work. There may also be a risk of a conflict in situations where the contractor itself does not perform such work, but an affiliate or subsidiary does. These types of cases are fact-intensive. But generally speaking, conflict of interest issues not only jeopardize potential contract awards, but they can also give rise to potential False Claims Act exposure, as this case illustrates.
