Implementation of the Administrative False Claims Act

FEDERAL LABOR RELATIONS AUTHORITY <CFR>5 CFR Part 2419</CFR> <SUBJECT>Implementation of the Administrative False Claims Act</SUBJECT> <HD SOURCE="HED">AGENCY:</HD> Federal Labor Relations Authority. <HD SOURCE="HED">ACTION:</HD> Proposed rule. <SUM> <HD SOURCE="HED">SUMMARY:</HD> This proposed rule would establish procedural regulations for the Administrative False Claims Act (AFCA) at the Federal Labor Relations Authority (FLRA). The Administrative False Claims Act is at 31 U.S.C. 3801 through 3812. </SUM> <EFFDATE> <HD SOURCE="HED">DATES:</HD> Written comments must be received on or before September 8, 2025. </EFFDATE> <HD SOURCE="HED">ADDRESSES:</HD> You may send comments, which must include the caption “Implementation of the Administrative False Claims Act,” by one of the following methods: • <E T="03">Federal eRulemaking Portal:</E> <E T="03">http://www.regulations.gov.</E> Follow the instructions for sending comments. • <E T="03">Email:</E> <E T="03">SolMail@flra.gov</E> . Include the caption “Implementation of the Administrative False Claims Act” in the subject line of the message. • <E T="03">Mail:</E> Thomas Tso, Solicitor, Federal Labor Relations Authority, 1400 K Street NW, Washington, DC 20424-0001. <E T="03">Instructions:</E> Do not mail written comments if they have been submitted via email. Interested persons who mail written comments must submit an original and 4 copies of each written comment, with any enclosures, on 8 <FR>1/2</FR> x 11 inch paper. Do not deliver comments by hand. <E T="03">Docket:</E> For access to the docket to read background documents or comments received, go to <E T="03">https://www.regulations.gov.</E> <FURINF> <HD SOURCE="HED">FOR FURTHER INFORMATION CONTACT:</HD> Thomas Tso, Solicitor and Federal Register Liaison, (771) 444-5779, <E T="03">SolMail@flra.gov.</E> </FURINF> <SUPLINF> <HD SOURCE="HED">SUPPLEMENTARY INFORMATION:</HD> <HD SOURCE="HD1">I. Background</HD> Congress originally enacted the Program Fraud Civil Remedies Act (PFCRA) in 1986. The purpose of the PFCRA was twofold: (1) to provide agencies that were the victims of false claims and statements an administrative remedy; and (2) to provide due process for all parties subject to that remedy. Public Law 99-509, sec. 6102 (October 21, 1986) (findings and purposes at 31 U.S.C. 3801 note). On December 23, 2024, the Servicemember Quality of Life Improvement and National Defense Authorization Act for Fiscal Year 2025 amended the PFCRA. Among other things, the amendments changed the PFCRA's name to the Administrative False Claims Act (AFCA). Public Law 118-159, sec. 5203(a). In that legislation, Congress also mandated that agencies promulgate regulations and procedures to carry out the AFCA within 180 days of enactment. Public Law 118-159, sec. 5203(j). This proposed rule includes the regulations required by that provision. The intent of this proposed rule is to cite the controlling statute when possible, repeating statutory provisions in the regulation only where necessary for the convenience of the regulated public. <HD SOURCE="HD2">Initial Inflation Adjustment of Penalties</HD> The Bipartisan Budget Act of 2015 included the Federal Civil Penalties Inflation Adjustment Act Improvements Act of 2015 (the 2015 Inflation Adjustment Act). Public Law 114-74, sec. 701 (November 2, 2015). The 2015 Inflation Adjustment Act amended a previous statutory scheme in order to improve the effectiveness of civil monetary penalties and to maintain their deterrent effect. Among other things, the 2015 Inflation Adjustment Act mandated an initial catch-up inflation adjustment for certain civil penalties by August 1, 2016, to be followed by annual inflation adjustments each year thereafter. 28 U.S.C. 2461 note. The statute capped the initial inflation increase at 150% of the original penalty. The FLRA did not have regulations for the Program Fraud Civil Remedies Act, the previous name of the AFCA, in 2015. The FLRA, therefore, could not adjust penalties under the 2015 Inflation Adjustment Act contemporaneously with the first adjustment period. We have determined that the FLRA can, however, adjust AFCA penalties consistent with the 2015 Inflation Adjustment Act. That adjustment remains constrained by the initial inflation adjustment cap. Accordingly, we are adjusting the penalty amount for the AFCA from the statutory $5,000 to $12,500. We arrived at this figure by determining the maximum increase permitted by the 2015 Inflation Adjustment Act—150 percent of $5,000, or $7,500—and adding that amount to the base $5,000 penalty to yield a $12,500 adjusted penalty amount. This adjustment resulted in a lower increase than a full Consumer Price Index adjustment comparing October 1984 with March 2025 on the publicly available Bureau of Labor Statistics website at <E T="03">https://www.bls.gov/data/inflation_calculator.htm</E> (last accessed April 22, 2025). The FLRA invites public comment on its adjustment methodology and results. <HD SOURCE="HD1">II. Findings and Certifications</HD> <E T="03">Regulatory Planning and Review:</E> Executive Orders 12866, 14215, and 14192 direct agencies to assess the costs and benefits of available regulatory alternatives and, if regulation is necessary, to select regulatory approaches that maximize net benefits. This proposed rule has not been designated a “significant regulatory action” under section 3(f) of Executive Order 12866. Accordingly, this proposed rule has not been reviewed by the Office of Management and Budget (OMB) as a significant regulatory action. This regulatory action determination is based on the limited scope of the proposed rule and the FLRA's statutory mission. The proposed regulations are required by the AFCA and would only affect an entity suspected of making a false claim or statement related to the FLRA. Furthermore, claims and statements subject to the AFCA are capped at $1 million. <E T="03">Legality and National Interest:</E> Executive Order 14219 directs agencies to evaluate potential new regulations under factors related to legality and the national interest. The FLRA has determined the proposed rule is lawful and in the national interest as the proposed rule is narrowly tailored to comply with the AFCA and will provide a tool for the FLRA to recover misappropriated taxpayer funds and deter misconduct. <E T="03">Regulatory Flexibility Analysis:</E> Pursuant to section 605(b) of the Regulatory Flexibility Act, 5 U.S.C. 605(b), the FLRA has determined that this proposed rule will not have a significant impact on a substantial number of small entities. The AFCA only affects entities suspected of making false claims or statements and, except in proceedings arising from such suspected false claims or statements, imposes no duties or obligations on small entities. <E T="03">Unfunded Mandates Reform Act of 1995:</E> This proposed rule change will not result in the expenditure by state, local, and tribal governments, in the aggregate, or by the private sector, of $100,000,000 or more in any one year, and it will not significantly or uniquely affect small governments. Therefore, no actions were deemed necessary under the provisions of the Unfunded Mandates Reform Act of 1995. <E T="03">Small Business Regulatory Enforcement Fairness Act of 1996:</E> This action is not a major rule as defined by section 804 of the Small Business Regulatory Enforcement Fairness Act of 1996, 5 U.S.C. 804. This proposed rule will not result in an annual effect on the economy of $100,000,000 or more; a major increase in costs or prices; or significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based companies to compete with foreign-based companies in domestic and export markets. <E T="03">Paperwork Reduction Act:</E> The proposed rule contains no additional information collection or record-keeping requirements under the Paperwork Reduction Act of 1995, 44 U.S.C. 3501, <E T="03">et seq.</E> <E T="03">Providing Accountability Through Transparency Act:</E> The Providing Accountability Through Transparency Act (Pub. L. 118-9) requires each agency, in providing notice of a rulemaking, to post online a brief plain-language summary of the proposed rule. The required summary of the document is available at <E T="03">https://www.regulations.gov.</E> <LSTSUB> <HD SOURCE="HED">List of Subjects in 5 CFR Part 2419</HD> Administrative practice and procedure </LSTSUB> For the reasons stated in the preamble, the FLRA proposes to amend 5 CFR chapter XIV as set forth below: Add part 2419 to read as follows: <HD SOURCE="HED">PART 2419—THE ADMINISTRATIVE FALSE CLAIMS ACT</HD> <CONTENTS> <SECHD>Sec.</SECHD> <SECTNO>2419.1 </SECTNO> <SUBJECT>Background.</SUBJECT> <SECTNO>2419.2 </SECTNO> <SUBJECT>Definitions.</SUBJECT> <SECTNO>2419.3 </SECTNO> <SUBJECT>Pre-complaint Procedures.</SUBJECT> <SECTNO>2419.4 </SECTNO> <SUBJECT>Complaint and Prehearing Procedures.</SUBJECT> <SECTNO>2419.5 </SECTNO> <SUBJECT>Hearing Procedures.</SUBJECT> <SECTNO>2419.6 </SECTNO> <SUBJECT>Post-hearing Procedures.</SUBJECT> </CONTENTS> <HD SOURCE="HED">Authority: </HD> 31 U.S.C. 3803(g), 3809; Sec. 5203(j), Pub. L. 118-159, 138 Stat. 2440. <SECTION> <SECTNO>§ 2419.1 </SECTNO> <SUBJECT>Background.</SUBJECT> (a) <E T="03">Legal authority.</E> This subpart implements the Administrative False Claims Act, codified at 31 U.S.C. 3801 through 3812. Section 3809 of that Act requires each authority head to promulgate regulations necessary to implement the provisions of the statute. Administrative False Claims Act liability is identified at 31 U.S.C. 3802. Liability for false claims can include an assessment of up to twice the amount of the false claim and a civil penalty. Liability for a fa ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━ Preview showing 10k of 41k characters. Full document text is stored and available for version comparison. ━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━━