Implementation of the Administrative False Claims Act

Implementation of the Administrative False Claims Act

SUPPLEMENTARY INFORMATION:

I. Background

On December 23, 2024, the National Defense Authorization Act (NDAA) for Fiscal Year 2025 (FY 2025 NDAA) (Pub. L. 118-159) was signed into law. Under section 5203, the FY 2025 NDAA revitalizes an existing but underutilized fraud enforcement mechanism: the Administrative False Claims Act of 2023 (AFCA). This Act, previously known as the Program Fraud Civil Remedies Act of 1986, offers a streamlined administrative remedy for addressing false claims and statements that the Department of Justice (DOJ) opts not to prosecute. The new statute requires amendment to the NASA's regulations at 14 CFR 1264 within 180 days of enactment. The AFCA complements the more widely known and widely used civil False Claims Act by providing an administrative process by which Federal executive branch agencies can address relatively small dollar value false claims that might not warrant the attention of the DOJ. The liability provisions of the AFCA remain closely modeled on those in the False Claims Act. The principal differences between the False Claims Act and the AFCA are that the AFCA does not include a qui tam enforcement mechanism, covers false written statements even in the absence of a claim, and provides for administrative rather than judicial resolution.

II. Regulatory Analysis

Executive Order (E.O.) 12866-Regulatory Planning and Review, E.O. 13563-Improving Regulation and Regulatory Review, and E.O. 14192-Unleashing Prosperity Through Deregulation

E.O.s 12866 and 13563 direct agencies to assess all costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits (including potential economic, environmental, public health and safety effects, distributive impacts, and equity). E.O. 13563 emphasizes the importance of quantifying both costs and benefits of reducing costs, of harmonizing rules, and of promoting flexibility. This rule is a significant regulatory action under E.O. 12866. This rule is expected to be an E.O. 14192 deregulatory action.

E.O. 13132-Federalism

E.O. 13132 requires agencies to ensure meaningful and timely input by state and local officials in the development of regulatory policies that may have a substantial, direct effect on the states, on the relationship between the National Government and the states, or on the distribution of power and responsibilities among the various levels of government. This action has been analyzed in accordance with the principles and criteria contained in the order, and NASA has determined that this action will not have a substantial direct effect or federalism implications on the states and would not preempt any state law or regulation or affect the states' ability to discharge traditional state governmental functions. Therefore, consultation with the states is not necessary.

E.O. 13175-Consultation and Coordination With Indian Tribal Governments

This final rule has been analyzed in accordance with the principles and criteria contained in E.O. 13175. NASA has determined that the removal of Subpart 1204.3 does not significantly or uniquely affect the communities of the Indian tribal governments or impose substantial direct compliance costs on them; the funding and consultation requirements of E.O. 13175 do not apply.

Regulatory Flexibility Act

Because no notice of proposed rulemaking is required, the Regulatory Flexibility Act does not require an initial or final regulatory flexibility analysis. ¹

Paperwork Reduction Act

No collections of information pursuant to the Paperwork Reduction Act are contained in the final rule.

Unfunded Mandates Reform Act of 1995

This rule will not impose a Federal mandate that may result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100 million or more in any one year.

For the reasons set forth in the preamble, NASA proposes to amend 14 CFR part 1264 as follows:

PART 1264-IMPLEMENTATION OF THE ADMINISTRATIVE FALSE CLAIMS ACT

(a) Basis. This part implements the Administrative False Claims Act, Public Law 99-509, sections 6101-6104, 100 Stat. 1874 (October 1986), amended Public Law 118-159, December 23, 2024, 138 Stat, 2440, to be codified at 31 U.S.C. 3801-3812. 31 U.S.C. 3809 of the statute requires each authority head to promulgate regulations necessary to implement the provisions of the statute.

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(e) * * *

(3) Made to the authority which has the effect of concealing or improperly avoiding or decreasing an obligation to pay, transmit or account for property, services, or money to the authority.

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(g) Consent hearing means that the authority and the defendant consent, as provided in § 1264.106(c), that the presiding officer be the Civilian Board of Contract Appeals (CBCA). The Chairperson may designate another administrative judge of the CBCA as presiding officer in a consent hearing.

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(l) Investigating official means the NASA Inspector General, or designee who is serving in a position for which the rate of basic pay, is not less than the minimum rate of basic pay for the grade GS-16 (under the General Schedule).

(m) Knows or has reason to know, for purposes of establishing liability, means that a person:

(1) Has actual knowledge that the claim or statement is false, fictitious, or fraudulent;

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

(3) Acts in reckless disregard of the truth or falsity of the claim or statement and no proof of specific intent to defraud is required.

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(p) Presiding officer, except as provided for pursuant to consent trial notice, means

(1) In the case of an authority to which the provisions of subchapter II of chapter 5 of title 5 apply, an ALJ appointed in the authority pursuant to section 3105 of such title or detailed to the authority pursuant to section 3344 of such title.

(2) If the authority is not subject to the provisions of Subchapter II of Chapter 5, Title 5, U.S.C. an officer or employee of the Authority who-

(i) Is appointed by the Authority head to conduct hearings under this part;

(ii) Is assigned to cases in rotation so far as practicable;

(iii) May not perform duties inconsistent with the duties and responsibilities of a presiding officer.

(iv) Is entitled to pay prescribed by the Office of Personnel Management independently of ratings and recommendations made by the authority and in accordance with Chapter 51 Title 5 and Subchapter III of Chapter 53 of Title 5;

(v) Is not subject to performance appraisal pursuant to Chapter 43 of Title 5; and

(vi) May be removed, suspended, furloughed, or reduced in grade or pay only for good cause established and determined by the Merit Systems Protection Board on the record after opportunity for hearing by such Board.

(3) A member of the board of contract appeals pursuant to section 7105 of title 41, if the Authority does not employ an available presiding officer under subparagraph (1) of this section.

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(r) Reviewing official means the NASA Associate Administrator for Mission Support or designee.

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(v) Is made to an authority which has the effect of concealing or improperly avoiding or decreasing an obligation to pay or transmit property, services, or money to the authority,

(2) Shall be subject, in addition to any other remedy that may be prescribed by law, to a civil penalty of not more than $14,308 for each such claim.

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(b) If the investigating official concludes that an action under the Administrative False Claims Act may be warranted, the investigating official shall submit a report containing the findings and conclusions of such investigation to the reviewing official.

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(a) If, based on the report of the investigating official under § 1264.103(b), the reviewing official determines that there is adequate evidence to believe that a person is liable under the Administrative False Claims Act, and there is a reasonable prospect of collecting, from a person with respect to whom the reviewing official is referring allegations of liability in such notice, the amount for which such person may be liable, the reviewing official shall transmit to the Attorney General a written notice of the reviewing official's intention to issue a complaint under § 1264.106.

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(4) An estimate of the amount of money or the value of property, services, or other benefits requested or demanded in violation of the Administrative False Claims.

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(2) In the case of allegations of liability under § 1264.102(a) with respect to a claim, the reviewing official determines that, with respect to such claim or a group of related claims submitted at the same time such claim is submitted (as defined in paragraphs (b) of this section), the amount of money or the value of property or services demanded or requested in violation of § 1264.102(a) does not exceed $1,000,000.

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(c) * * *

(1) Notice to Consent to the chairperson of the Armed Services Board of Contract Appeals (ASBCA), or Designee, as presiding officer;

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(c) * * *

(7) Scheduling dates for the exchange of witness lists, statements, and of proposed exhibits;

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(d) * * *

(1) A party seeking discovery must file a motion with the presiding officer. Such a motion shall be accompanied by a copy of the discovery request or, in the cast of depositions, a summary of the scope of the proposed deposition.

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(6) The presiding officer shall regulate the timing of discovery.

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(b) * * *

(9) That the parties simultaneously file specified documents or information as directed by the presiding officer.

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(a) Any amount collected under this chapter shall be credited first to reimburse the authority or other Federal entity that expended costs in support of the investigation or prosecution of the action, including any court or hearing costs; and amounts reimbursed under clause shall be deposited in:

(i) the appropriations account of the authority or other Federal entity from which the costs described in subparagraph (a) were obligated;

(ii) a similar appropriations account of the authority or other Federal entity; or

(iii) if the authority or other Federal entity expended nonappropriated funds, another appropriate account; and remain available until expended.

(b) Any amount remaining after reimbursements described in above shall be deposited as miscellaneous receipts in the Treasury of the United States.

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(a) A notice to the person alleged to be liable with respect to a claim or statement shall be mailed or delivered in accordance with 14 CFR 1264.107 not later than the later of-

(1) 6 years after the date on which the violation is committed; or

(2) 3 years after the date on which facts material to the action are known or reasonably should have been known by the authority head, but in no event more than 10 years after the date on which the violation is committed.

(b) Such notice shall specify the allegations of liability against such person and shall state the right of such person to request a hearing with respect to such allegations.

[FR Doc. 2025-23963 Filed 12-29-25; 8:45 am]

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