2 KBR Cases Illuminate Kickback Risks For Contractors

Law360, New York (December 3, 2013, 8:04 PM EST) -- Two decisions in 2013, in the Fifth Circuit and the Federal Circuit, both involving Kellogg Brown & Root Services Inc. ("KBR"), dealt with vicarious liability under the Anti-Kickback Act, 41 U.S.C. §§ 51-58, for subcontractor kickbacks accepted by KBR’s employees. These decisions illuminate the risk of strict liability for contractors in kickback situations, and serve as a reminder to contractors to strengthen and reinforce corporate compliance mechanisms.

The Anti-Kickback Act contains two remedies, in §55 (a)(1) and (a)(2). Section (a)(1) provides that the Government may recover...
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