Scientific instrument company, owner, settle Buy American Act violations for $625,000

by Ben Vernia | September 7th, 2022

On September 7, the Department of Justice announced that a Boulder, Colorado-based supplier of scientific instruments, and its owner had agreed to settle a whistleblower’s allegations that it had violated the Buy American Act in connection with sales to the federal government. According to DOJ’s press release:

The Department of Justice announced today that Instec Inc. (Instec), located in Boulder, Colorado, and Dr. Zhong Zou, Instec’s owner and president, have agreed to pay $625,000 to resolve allegations that the company and Zou violated the False Claims Act by failing to comply with the requirements of the Buy American Act (BAA) when selling scientific instruments to federal agencies and national laboratories.

The BAA was enacted in 1933 to protect U.S. manufacturing by creating a preference for domestic products when the federal government purchases supplies. The United States alleged that Instec and Zou knowingly violated the BAA by falsely certifying that goods sold to the government pursuant to contracts containing domestic-preference requirements were of domestic origin, when these good were actually manufactured in China.

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The resolution obtained in this matter was the result of a coordinated effort between the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section and the U.S. Attorney’s Office for the District of Colorado with assistance from the Department of Energy Office of Inspector General, the Defense Criminal Investigative Service, the National Aeronautics and Space Administration Office of Inspector General and the Army Criminal Investigation Division (CID).

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The whistleblower will receive $124,500 of the settlement, the Government announced (a 19.92% relator’s share).

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