Santa Clara County Municipal Code Div. A41 Submitting False Claims; Monetary Penalties

The Board of Supervisors finds that government contracts and procurement may incur significant risk relating to the potential for submission of fraudulent claims for money, property, or services funded by taxpayers. Therefore, the County's ability to identify and recover damages from fraudulent claimants is an essential civil tool to preserving the integrity of vital government services and to ensure the residents of the County receive the full value of their tax dollars.

The purpose of this Division is to prevent contractors and subcontractors from defrauding the public treasury through the tender of false claims, or the failure to disclose false claims, and to establish mechanisms for recovery of costs associated with such actions.

(Ord. No. NS-300.898, 6-21-16)

Whenever they appear in this Division, the following capitalized terms shall have the following meanings:

(a) "Contract" means any agreement between the County and Contractor to provide or procure labor, materials, equipment, supplies, or services to, for, or on behalf of the County to be paid out of monies deposited in the County Treasury or out of trust monies under the control of or collected by the County or through the provisions of property and/or services by the County.

(b) "Contractor" means any person, corporation, or other entity who enters into a Contract with the County.

(c) "County" means the County of Santa Clara.

(d) "Claim" means any request or demand for money, property, or services made to any employee, officer, or agent of the County, or to any Contractor, subcontractor, grantee, or other recipient, whether under contract or not, if any portion of the money, property, or services requested or demanded issued from, or was provided by, the County.

(e) "Knowingly" means that a Contractor, a Contractor's subcontractor, or an agent or employee thereof, with respect to information, does or has any of the following:

(1) Has actual knowledge of the information; or

(2) Acts in deliberate ignorance of the truth or falsity of the information; or

(3) Acts in reckless disregard of the truth or falsity of the information.

Proof of specific intent is not required to act knowingly, and reliance on the claim by the County is also not required to prove that a Contractor, subcontractor, or an agent or employee thereof acted knowingly.

(Ord. No. NS-300.898, 6-21-16)

The covenant of good faith and fair dealing is contained in every County goods or services Contract, and Contractors and subcontractors shall at all times deal in good faith with the County and shall submit claims, requests for equitable adjustments, requests for change orders, requests for contract modifications or requests of any kind seeking increased compensation on a County Contract only upon a good-faith, honest evaluation of the underlying circumstances and a good-faith, honest calculation of the amount sought.

Any Contractor, subcontractor, or consultant who commits any of the following acts shall be liable to the County for three times the amount of damages which the County sustains because of the act of that Contractor, subcontractor or consultant. A Contractor, subcontractor or consultant who commits any of the following acts shall also be liable to the County for the costs, including attorney's fees, of a civil action brought to recover any of those penalties or damages, and may also be liable to the County for a civil penalty of up to $25,000.00 for each false claim:

(a) Knowingly presents or causes to be presented to an officer or employee of the County a false claim;

(b) Knowingly makes, uses, or causes to be made or used a false record or statement to get a false claim paid or approved by the County;

(c) Conspires to defraud the County by getting a false claim allowed or paid by the County;

(d) Knowingly makes, uses, or causes to be made or used a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the County; and/or

(e) Is a beneficiary of an inadvertent submission of a false claim to the County, subsequently discovers the falsity of the claim, and fails to disclose the false claim to the County within a reasonable time but not more than 60 days after discovery of the false claim.

The provisions of this Division are not exclusive, and the remedies provided for in this Division shall be in addition to any other remedies provided for in any other law or available under common law.

(Ord. No. NS-300.898, 6-21-16)

Every Contractor, and Contractor's subcontractor, for goods or services performed at the expense of the County or the cost of which is paid for out of monies deposited in the County Treasury, whether directly awarded or indirectly by or under subcontract, sub-partnership, day labor, station work, piece work, or any other arrangement whatsoever, is subject to the requirements of Section A41-3.

Liability under this Section shall be joint and several for any act committed by two or more persons.

(Ord. No. NS-300.898, 6-21-16)

The County Counsel, with consent of the County Executive, shall be empowered to bring actions to enforce this Division.

(Ord. No. NS-300.898, 6-21-16)

This Section does not apply to any controversy involving an amount of less than $500.00 in value. For purposes of this Section, "controversy" means any one or more false claims submitted by the same Contractor, subcontractor, or consultant in violation of this Section.

(Ord. No. NS-300.898, 6-21-16)

(a) In general, any employee, contractor, or agent shall be entitled to all relief necessary to make that employee, contractor, or agent whole, if that employee, contractor, or agent is discharged, demoted, suspended, threatened, harassed, or in any other manner discriminated against in the terms and conditions of employment because of lawful acts done by the employee, contractor, agent or associated others in furtherance of an action under this Division or other efforts to stop one or more violations of this Division.

(b) Relief under subsection (a) shall include reinstatement with the same seniority status that employee, contractor, or agent would have had but for the discrimination, two times the amount of back pay, interest on the back pay, and compensation for any special damages sustained as a result of the discrimination, including litigation costs and reasonable attorneys' fees.

(c) Both the County and/or a person described by subsection (a) may bring a civil action to enforce this Section; provided, however, that such a civil action under this Section may not be brought more than three (3) years after the date when the retaliation occurred.

(Ord. No. NS-300.898, 6-21-16)

The provisions of this Division are severable. If any section, subsection, paragraph, sentence, clause or phrase of this Division is for any reason held unconstitutional or invalid, the remaining parts of this Division shall remain fully effective. If the application of any part of this Division to any person or circumstance is held invalid, the application of that part of this Division shall not be affected regarding other persons or circumstances.

(Ord. No. NS-300.898, 6-21-16)