United States Ex Rel. McBride v. Halliburton Co.
2017 U.S. App. LEXIS 2778
| D.C. Cir. | 2017Background
- Relator Julie McBride sued KBR under the False Claims Act alleging KBR inflated “headcount” tallies for MWR (morale, welfare, and recreation) facilities at Camps Fallujah (B‑3) and Ar Ramadi (B‑4) from July 2004–March 2005, claiming this made KBR’s claims for reimbursement impliedly false.
- KBR operated under LOGCAP III Task Order 59, a cost‑plus‑award‑fee contract; MWR costs were a small portion (~1.5%) of Task Order 59 billings.
- McBride compiled Sit Reps containing headcount data and alleged KBR inflated counts, destroyed sign‑in sheets, and stopped the practice after she complained.
- Discovery: DCAA investigated after suit was filed but did not disallow any MWR costs; the Government declined to intervene in the FCA case.
- The District Court ultimately granted summary judgment for KBR, concluding McBride offered no evidence that any misrepresentation about headcounts was material to the Government’s decision to pay.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether false/omitted headcount data can render KBR’s reimbursement claims false under an implied‑certification theory | McBride: inflated headcounts were false records and omitted violations of FAR recordkeeping/cost‑reasonableness requirements, so claims were impliedly false | KBR: headcounts were not contractually required supporting documentation for billed costs and did not affect amounts billed | Held for KBR: headcount data was not shown to be a contractual or regulatory requirement material to payment |
| Whether McBride presented evidence that inaccuracies were material to the Government’s payment decision | McBride: an ACO said he "might" have investigated further and might have disallowed costs; that suffices to show potential materiality | KBR: the ACO’s statement is speculative; Army witnesses testified headcounts did not affect billing or award fees; DCAA investigated and did not disallow costs | Held for KBR: speculative testimony insufficient; actual Government conduct (investigation without disallowance, continued award fee) is strong evidence of non‑materiality |
| Whether maintaining false headcounts could have caused unreasonable/unallowable costs | McBride: inflated headcounts could justify excessive staffing, making personnel costs unreasonable or unsupported | KBR: staffing decisions were based on camp population, facility type, hours, and other factors—not headcounts; no evidence staffing or costs were excessive | Held for KBR: McBride failed to provide evidence linking headcounts to costs or unreasonableness |
| Whether summary judgment was appropriate given the record | McBride: factual disputes remain and summary judgment was premature; also contested requirement to amend complaint | KBR: record (detailed discovery, Army testimony, DCAA investigation) shows no genuine dispute on materiality or falsity | Held for KBR: summary judgment affirmed because no genuine dispute that any misrepresentation was immaterial to payment; District Court did not abuse discretion on amendment requirement |
Key Cases Cited
- Universal Health Servs. v. United States ex rel. Escobar, 136 S. Ct. 1989 (2016) (adopts implied‑certification theory but requires demanding materiality and scienter standards)
- United States v. Science Applications Int’l Corp., 626 F.3d 1257 (D.C. Cir. 2010) (explains implied‑certification theory and rigorous materiality requirement)
- Anderson v. Liberty Lobby, 477 U.S. 242 (1986) (summary judgment standard requires no genuine issue of material fact)
- Holcomb v. Powell, 433 F.3d 889 (D.C. Cir. 2006) (standard of review for summary judgment stated)
- United States ex rel. Folliard v. Gov’t Acquisitions, 764 F.3d 19 (D.C. Cir. 2014) (plaintiff must show a reasonable factfinder could find a material violation)
- Grimes v. District of Columbia, 794 F.3d 83 (D.C. Cir. 2015) (plaintiff cannot rely solely on complaint allegations to survive summary judgment)