The opinion of the court was delivered by: Oberdorfer, District Judge.
For the reasons stated in an accompanying Memorandum, it is
this 11th day of March, 1999, hereby
ORDERED: that plaintiff/relator's motion for leave to file an
amended complaint  is GRANTED; and it is further
ORDERED: that defendant's motion to strike plaintiff/relator's
motion for summary judgment  is DENIED; and it is further
ORDERED: that defendant's motion to dismiss for lack of
subject-matter jurisdiction  is GRANTED; and it is further
ORDERED: that defendant's motion to dismiss on constitutional
grounds  is DENIED AS MOOT; and it is further
ORDERED: that the parties' cross-motions for summary judgment
[203, 204] are DENIED AS MOOT.
Mervyn Schwedt, former director of the Pension and Welfare
Benefits Administration's ("PWBA") Office of Information
Management,*fn1 filed this suit against Planning Research
Corporation, Inc. ("PRC") on August 24, 1992. In his complaint,
Schwedt alleged that PRC violated the False Claims Act,
31 U.S.C. § 3729-3733, in its performance of a government contract. That
contract, which became effective September 22, 1989, called for
PRC to develop the software subsystem for a Field Office
Information System ("FOIS") for the PWBA. The contract stipulated
that PRC would submit twenty specified deliverables during the
course of the project, and that the government would remit a
specified payment upon acceptance of each deliverable.
The government accepted and paid for sixteen of the specified
deliverables. PRC submitted the other four deliverables together
on both June 8, 1990 and December 7, 1990; the government
rejected the entire set on both occasions. A third submission of
the four deliverables came on May 17, 1991, after which the
government accepted and paid for one of the four items. PRC
resubmitted the remaining three items on September 13, 1991,
prompting the government to reject them and to issue a stop work
order. PRC has performed no work on the contract since the order,
but has requested two "equitable adjustments" totaling $2.1
million. Schwedt, who was responsible for managing the FOIS
contract, filed this suit alleging that PRC "knowingly on no less
than four occasions present[ed] . . . non-functional and
non-compliant software . . . while wrongfully and knowingly
misrepresenting [in progress reports] that said software was
compliant and functional." Compl. at ¶ 25. The United States
Department of Justice conducted an investigation, but declined to
intervene. 31 U.S.C. § 3730(b)(4)(B).
An Order of March 31, 1994 dismissed the complaint for failure
to state certain claims with the requisite specificity, and for
failure to state a claim that the United States suffered damages
as a result of the allegedly false progress reports. United
States ex rel. Schwedt v. Planning Research Corp., Inc., 1994 WL
118222 (D.D.C. Mar.31, 1994). The court of appeals remanded for
consideration of whether the allegedly false progress reports
indeed caused the government damage. United States ex rel.
Schwedt v. Planning Research Corp., 59 F.3d 196 (D.C.Cir. 1995).
After discovery concluded, Schwedt filed a motion for leave to
file a first amended complaint. The proposed amended complaint
joins two individual defendants, and adds two substantive claims:
that PRC made false claims by submitting inaccurate cover letters
to accompany the incomplete software; and that PRC made false
claims by requesting the equitable adjustments in 1991 and 1992.
PRC opposes the motion for leave to file the amended complaint,
arguing, inter alia, that it exceeds the scope of the court of
appeals' mandate. While that motion was pending, PRC filed a
motion to dismiss for lack of subject-matter jurisdiction, a
motion to dismiss on constitutional grounds,
and a motion for summary judgment. Schwedt also filed a motion
for summary judgment, which PRC moves to strike because it is
predicated on the proposed amended complaint, leave for which to
file has not been granted. On December 14, 1998, the United
States filed an amicus brief in response to the parties'
dispositive motions. The parties filed responses to the
government's brief on January 19, 1999, and a hearing was held on
February 10. For purposes of this memorandum, the amended
complaint will be treated as having been filed.
PRC first moves to dismiss on jurisdictional grounds, arguing
that Schwedt's suit fails to satisfy the False Claims Act's
so-called public disclosure provision. That provision, which was
part of the 1986 amendments to the Act, establishes that courts
lack subject-matter jurisdiction for qui tam suits that are
based upon the public disclosure of allegations or
transactions in a criminal, civil, or administrative
hearing, in a congressional, administrative, or
Government Accounting Office report, hearing, audit,
or investigation, or from the news media, unless the
action is brought by the Attorney General or ...