Full opinion text
SUPERSEDING MEMORANDUM OBERDORFER, District Judge. The instant qui tam action was filed on June 6, 1996, on behalf of the United States by plaintiffs John Ervin and Ervin Associates, Inc. (collectively, “Ervin”) against several entities, including Hamilton Securities Group, Inc. (“Hamilton”). Over the course of four days of trial i; a October 2003, Ervin submitted testimou .y and documentary evidence against Ham;' il-ton and rested. Thereupon, Hamilb on. moved for Judgment on Partial Findin .gs under Federal Rule of Civil Procedure 52. A Ja nuary 7, 2004 Order granted the r notion a vith respect to Count VII of the £ Second .Amended Complaint, related to the West of Mississippi note sale. [Dkt. No. 198]. The Order also granted the me >tkm with i respect to Counts I, III, IV, V, , VI, and VIII of the Second Amended ( Complaint on the grounds that Ervin fail .ed to identif y or introduce evidence, in eith ier its pretria 1 statement or at trial, in supf >ort of the allegations contained in these C iounfs. Id. This Order denied Hamilton’s : motion with respect to Count IX (related to the North and Central note sale), Ce nunt II (related to the Single Family Oi tiering), Counts XIII and XIV (related to the Williams, Adley 8(a) contract), anc 1 Counts XV ¡and XVI (related to the crol sscutting conti -ac :t). Id. Over three trial days in July 2 ,p;04, Hamilton presented its trial defense . Ervin did not put on a rebuttal. Follov ,/mg the completion of the trial, the pari /jes submitted modified proposed findings 0f fact and conclusions of law. An Augu st 16, 2004 Order and Partial Judgment n aied that (1) Ervin is entitled to Judgment„ on Count IX of the Second Amended C omplaint — related to the North Central f Jale, (2) the amount of damages caused tj0 the United States by Hamilton’s False, Claim on the North-Central sale was $11,511,244.00, and (3) Hamilton is entitle^ to Judgment on the counts related to the three remaining issues: Count II , related to the Single Family Offering,, Counts XIII and XIV, related to the Williams 8(a) contract, and Counts XV and XVI, related to the crosscutting contract. [Dkt. No. 452]. The Court’s Order and Partial Judgment also ordered supplemental briefing “addressing (1) the proper penalty to be assessed under 31 U.S.C. '§ 3729; and (2) the proper division of payment as between Ervin and the United StEites.” Id. The parties and the United States-ifiled briefs in response. See Hamilton’s Mem. Regarding Proper Penalty, filed Aug. 27, 2004 [Dkt. No. 454]; Joint Suppl. Brief of the United States and Ervin, 'dated Aug. 16, 2004, filed Aug. 26, :200& ![Dkt. No. 455]; Suppl. Report by United ‘States, filed Oct. 13, 2004 [Dkt. No. 460], Having considered the trial testimony And ¡documents offered by both parties, ¡and having reviewed the above-recited pleadings, the Court enters the following Memorandum and accompanying Order, .granting judgment for plaintiffs John Er-vin and Ervin Associates, Inc. on Count IX of the Second Amended Complaint and granting judgment for defendant Hamilton Securities Gróüp, Inc. on Counts II, XIII and XIV of the Second Amended Complaint. The amount of damages assessed against Hamilton is $4,533,732.00 plus a $5,000.00 penalty, for a total damage award of $4,538,732.00. This Memorandum supersedes the Court’s Memorandum filed on August 16, 2004 [Dkt. No. 462]. I. FINDINGS of fact A. Background Throughout the 1970s and 1980s, the United States Department of Housing and Urban Development (“HUD”), as part of an effort to promote broad home ownership, insured the mortgages of certain individuals and entities for whom private financing was not feasible. United States ex rel. Ervin & Assoc., Inc. v. Hamilton Sec. Group, 298 F.Supp.2d 91, 93 (D.D.C.2004) [hereinafter, “Jan. 7, 2004 Mem.”]. HUD often assumed control of and responsibility for the mortgages if the insured individuals and entities failed to make the mortgage payments. Id. In so doing, HUD accumulated a portfolio of over $408 billion dollars by September 1993. Id. This massive real estate management responsibility' interfered with HUD’s ability to discharge its various other responsibilities.. Id. In 1993, in order to allow HUD to “better fulfill its mission,” HUD initiated a program to restructure its portfolio. Hamilton Ex. 7 at HUD/EE 817. HUD sought to sell its inventory of single family and multifamily HUD-held mortgages and HUD-held properties. See id. Because HUD had never before engaged in a massive sell-off of mortgage assets and did not have the in-house expertise to manage such a project, HUD decided to contract the note sale operations to the private sector. See id. Fan- Housing Authority’s Commissioner, Nicolas Retsinas, assigned Helen Dunlap, HUD’s Deputy Assistant Secretary for Multifamily Housing, to oversee the design of the loan sales program. Tr. 7/20/2004 AM at 120, In. 17-19. Subsequently, on September 30, 1993, HUD awarded the “first financial advisor contract” to Hamilton. See Hamilton Ex. 8. Under the contract, Hamilton designed and developed the blueprint for selling HUD-held mortgage notes through public auctions. See Hamilton Ex. 8; Tr. 11/3/2003 AM at 259, In. 2-14; id. at 331, In. 22 — 332, In. 3; Tr. 7/20/2004 AM at 122,. In. 16-22. Additionally, Hamilton’s responsibilities in its role as financial advisor' to HUD included “all aspects of running asset sales and getting supportive services to assist in doing that such as conducting analyses, strategizing approaches to sales, [and] due diligence.” Tr. 10/29/03 PM at 13, In. 5-16. Hamilton, in turn, employed Bell Labs (now Lucent Technologies) as a subcontractor to develop and run an optimization model to assist in the mortgage note sales. Tr. 10/30/03 PM at 114, In. 11-115. The optimization model was a compiut-e r-operated algorithm designed to select a: s winners that combination of bids which, if accepted, would produce the maximum po tential revenue to HUD. Jan. 7, 2004 M< 5m. at 5. Hamilton also retained Coolers & Lybrand to manage security andi bid pro cessing for the auctions. Id. at 6. B. Williams, Adley 8(a) Contract 1. Small Business Administration Section 8(a) Program In 1994, HUD decided to procure due diligence services for its loan sale s program from a minority-owned contractor through the Small Business Administration Section 8(a) program. The purpose i of the Sectio r i 8(a) program is to assist sm lall and socially disadvantaged businesses!. Tr. 10/29/2'(103 PM at 8, In. 18-22. To tl iis end, the Set5 tion 8(a) program waives nnan;y of the competitive requirements in traditional governor ent procurement regulation!s. Tr. 10/30/2013'3 AM at 115, In. 22 — 116, In. 4. Thus, the; Section 8(a) program permitted HUD to procure services from a single contractor without competitive bidding. Id. 2. Williams, Adley Vies for HUD Due Diligence Contract In the fall of 1994, HUD contacted Williams, Adley & Company (“William, Ad-ley”), a certified Section 8(a) contractor, and requested an in-person presentation of Williams, Adley’s due diligence capabilities. Tr. 7/19/2004 at 86, In. 19-22. At the time, Williams, Adley was a certified public accounting firm that provided a variety of accounting services, including due diligence to government agencies. Id. at 88, In. 21-25. Williams Adley had previously provided due diligence and financial advisory services to HUD. Id. at 84, In. 19 — 85, In. 2. Contemporaneously, HUD solicited presentations from at least two other due diligence contractors. Tr. 7/20/2004 at 139, In. 11-14; . id. at 140, In. 15-18. On October 7, 1994, HUD selected Williams, Adley as the “8(a) firm of choice” and provided a Request for Proposal. Tr. 7/19/2004 at 89, In. 17-19; Williams, Adley Ex. 20. According to Helen Dunlap, HUD’s Deputy Assistant Secretary, HUD selected Williams, Adley because “they were the most experienced of the [sic], at the kinds of things we were looking for of the firms, and they also had the most and we perceived it [sic] had capacity and they had good recommendations .... ” Tr. 7/20/2004 at 140, In. 1-5. Hamilton did not recommend Williams, Adley to HUD, or otherwise participate in the Section 8(a) contractor selection process. Id. at In. 19-24. On October 26, 1994, Williams, Adley responded to HUD’s Request for Proposal, submitting both technical and cost proposals. Tr. 7/19/2004 at 90, In. 22 — 91, In. 10; Williams, Adley Exs 23, 24. Hamilton was not named as a potential subcontractor under the Section 8(a) contract in Williams, Adley’s technical proposal. Williams, Adley Ex. 24. 3. Williams, Adley Vies for HUD’s Financial Advisory Services Contract HUD subsequently asked Williams, Ad-ley about its capabilities to perform financial advisory services in connection with the loan sales program. Tr. 7/19/2004 at 92, In. 10-12. HUD informed Williams, Adley that they needed a “stop gap measure” until they had a new financial advisory contract in place. Id. at 94, In. 13-18. Williams, Adley previously had contracted to provide financial advisory services under other HUD contracts, and in turn, had subcontracted that work to other firms. Id. at 84, In. 24 — 85, In. 2. Henry Adley (“Adley”),' a partner at Williams, Adley, contacted financial advisors at Kenneth Leventhal, Ernst & Young, Chemical Bank and Hamilton in preparing a response to HUD’s financial advisory services request. Id. at 93, In. 10-17; id. at 94, In. 23. According to Adley, he identified Kenneth Leventhal, Ernst & Young and Chemical Bank because he had previously worked with each of them. Id. at 93, In. 10-17. Adley learned of Hamilton’s role in the design and development of the loan sales program prior to submitting its initial proposals because he wanted to know of the major “stakeholders” in the loan sales process. Id. at 93, In. 20 — 94, In. 12. Williams, Adley had at least one discussion with Hamilton employee Robert Robinson prior to submitting its revised technical and cost proposals. Tr. 10/31/2003 PM at 191, In. 13-18. Adley testified that “after careful consideration in looking at the qualifications” of the firms, Williams, Ad-ley selected Hamilton as one of its teaming partners. Id. at 95, In. 16-17. No one at HUD steered Williams, Adley towards Hamilton. Id. at In. 1-22. On November 2, 1994, Williams, Adley submitted revised technical and cost proposals identifying a number of potential subcontractors, including Hamilton. Id. at 96, In. 1-5; Tr. 10/29/2003 PM at 35, In. 15-20; id. at 47, In. 7 — 48, In. 2; Tr. 10/30/2003 AM at 115, In. 14-18; Williams, Adley Exs. 26, 27. 4.HUD Awards Williams, Adley Section 8(a) Contract On or about December 7, 1994, HUD awarded Williams, Adley a Section 8(a) “indefinite delivery, indefinite quantity” contract. Hamilton Ex. 10 at 2; Tr. 10/29/2003 PM at 39, In. 11. The contract defined the basic arrangement, setting out the broad base of tasks and responsibilities that HUD required. Tr. 10/29/2003 PM at 39, In. 15 — 40, In. 3. Specific work requirements were to be defined at later dates, through statements of work and the award of task orders, against the basic indefinite quantity contract. Id. The subsequent statements of work were the subject of further negotiations between HUD and Williams, Adley. Id. HUD contracting officer Annette Hancock knew Hamilton was serving as financial advisor to HUD on the loan sales program both when Williams, Adley submitted its revised proposal and when the Section 8(a) contract was awarded. Tr. 10/30/2003 AM at 110, In. 2-8; id. at 115, In. 19-21. Hancock testified that she ensured that the appropriate policies and procedures were adhered to and complied with in the award of the Section 8(a) contract. Id. at 109, In. 23 — 110, In. 1. At the time HUD awarded the Section 8(a) contract to Williams, Adley, Hancock understood that Williams, Adley “would solicit services from various vendors who provide whatever those supportive services that William, Adley needed to augment their resources.” Tr. 10/29/2003 PM at 49, In. 24 — 50, In. 10. Specific subcontractors would be identified when Williams, Adley submitted proposals for task orders identifying the team Williams, Adley thought appropriate to perform the work. Id. at 45, In. 25 — 46, In. 4. HUD never indicated any dissatisfaction with Williams, Adley’s subcontractor selection process. Tr. 7/19/2004 at 100, In. 12-17. 5. Hamilton Drafts Statements of Work for Potential Task Orders As HUD’s financial advisor under the First Financial Advisor contract, Hamilton was tasked with helping HUD develop and design the entire loan sales program. Tr. 11/3/2003 AM at 331, In. 22 — 332, In. 3. In this role, Hamilton drafted statements of work and task orders, including task orders for financial advisory services under the Section 8(a) contract. Tr. 11/3/2003 AM at 262, In. 9-13; id. at 332, In. 22— 333, In. 4. HUD reviewed Hamilton’s draft statements of work and task orders and made the final decision as to what task orders to issue, what contract vehicles to use and what language to include in the task orders. Id. at 262, In. 13-15; id. at 286, In. 21-24; id. at 288, In. 24-25. Prior to the issuance of individual task orders, Hamilton had no guarantee that it would receive any financial advisory subcontract work under the Section 8(a) contract. Tr. 11/3/2003 AM at 267, In. 22 — 268, In. 15; id. at 296, In. 3-19; Ervin Ex. 194 at 9628-9629. 6. Williams, Adley Selects Hamilton as Subcontractor on HUD Contract Williams, Adley selected , Hamilton as the subcontractor on its financial advisory services contract with HUD. Tr. 10/30/2003 AM at 117, In. 21 — 118, In. 1; Tr. 7/19/2004 at 97, In. 19-24. HUD contracting personnel subsequently raised issues with regard to the fees Williams, Adley proposed for Hamilton’s work under the Section 8(a) contract, and those fees were the subject of negotiations. Id. Hamilton proposed to charge HUD a fixed percentage per month of the unpaid principal balance of the portfolio being sold for loan sale advisory services performed as a subcontractor to Williams, Adley. Williams, Adley Ex. 27. Adley worked directly with Hancock in “negotiating and working out the details and finalizing the task orders.” Tr. 7/19/2004 at 98, In. 23 — 99, In. 5. After the negotiations, HUD’s Office of Procurements and Contracts approved all costs in each particular task order. Id. at 99, In. 8-14. Hancock testified that, based on her independent research, she believed Hamilton’s “basis points” pricing methodology was typical for the industry and appropriate under the subcontract with Williams, Adley. Tr. 10/29/2003 PM at 22, In. 9-19; id. at 25, In. 13-19; Tr. 10/30/2003 AM at 118, In. 2-7. C. Multifamily Note Sales Beginning in March 1995, Hamilton conducted a series of multi-family note sales, including the West of Mississippi Note Sale, held on September 18-19, 1995, see Ervin Ex. 77 at 2, ¶ 5, and the North and Central Sale, conducted on August 5-6, 1996. See id. at 5, ¶ 18. 1. West of Mississippi Note Sale On September 18-19, 1995, bidders for the West of Mississippi mortgage loans placed their bids, according to bid specifications set by Hamilton, including instructions that bidders could set bid floors, expressed in terms of minimum unpaid principal balances on the mortgages. See Jan. 7, 2004 Mem. at 9. Hamilton received 400 bids from 73 different bidders for approximately $622 million in unpaid principal balances worth of mortgages. Id. After the bid period closed, Coopers & Lybrand, in its role as subcontractor, transmitted the bid card data to Bell Labs. Id. a. The Optimization Model Report Sol Schindler (“Schindler”) was head of Bell Labs’ subcontracting work for Hamilton during the West of Mississippi sale. Jan. 7, 2004 Mem. at 9. As such, Schindler was in charge of developing and running the optimization model. Id. Schindler applied the computerized optimization model to the data from the bid cards on- the afternoon of September 20,1995. Id. at 9-10. Later that afternoon, Schindler provided a computerized report of the results to Hamilton employee Robert Robinson (“Robinson”). Id. at 10. Robinson was Hamilton’s Assistant Treasurer, a member of Hamilton’s Board of Directors and the principal point of contact on the West of Mississippi sale between Hamilton and Bell Labs. Id. at 8. Accompanying the report was an e-mail from Schindler to Robinson, stating that “[t]his looks, suspicious and should be checked.” Hamilton Ex. 44. In response, Robinson immediately instructed Schindler to re-run the optimization model. Tr. 10/31/03 PM at 151, In. 9-18. Robinson directed that the model used by Bell Labs calculate winning bids as a function of the unpaid principal balance owed on the mortgages, rather than as a function of the gross revenue generated by the bids, or “revenue model,” used by Schindler for the initial run. See Er-vin Ex. 77 at 3, ¶ 6. Unable to create an “unpaid principal balance model” in the time frame required by Hamilton, Schindler instead adapted the revenue model to approximate an unpaid principal balance model and re-processed the bids, according to Robinson’s instructions. Id. ¶¶ 7-8; Hamilton Ex. 45. Schindler forwarded the new results to Robinson with a cover email stating, “I changed the minimum revenue to minimum [unpaid principal balance] by prorating as a temporary fix.” Hamilton Ex. 45. b. Hamilton Reports Results to HUD Hamilton reported the results of the West of Mississippi note auction sale, as calculated by Bell Labs’ second optimization run, to HUD on Friday, September 22, 1995. Jan. 7, 2004 Mem. at 15. “Hamilton reported gross proceeds, as determined by the optimization model, of $385,196,928.49. HUD relied upon Hamilton’s statements in choosing the optimal bidders on its loan sales.” Id. c. The Coopers & Lybrand Fax About a week after Hamilton reported the West of Mississippi sale results to HUD, Michael Brocks, of Coopers & Lyb-rand, sent a fax to Henry Fan, of Hamilton, indicating that something appeared wrong with the optimization results. Jan. 7, 2004 Mem. at 8. Michael Brocks (“Brocks”) was a certified public accountant. Id. “His primary role in the West of Mississippi sale was to establish procedures and protocols so that bids could be processed in an orderly and secure fashion.” Id. Henry Fan (“Fan”) earned a PhD from the Massachusetts Institute of Technology and began working for Hamilton in August of 1995. Id. The West of Mississippi sale was Fan’s first note sale project work for Hamilton. Id. As Brocks recalled at trial, he: started thinking that I remember seeing a bid that was sizable, that stuck out in my mind during the auction [ALI # 3]. And I wondered why they didn’t win. I just thought they should win. So I prepared this Excel analysis which is on Page 2 of [Ervin Ex. 78] and from— again, it appeared that ALI [# 3] should have won because their bid exceeded the others by $2 million. Tr. 10/30/03 PM at 101, In. 25 — 102, In. 7. Brocks forwarded to Fan the Excel analysis, which compared the winning bids, as determined by Bell Labs, with ALI # 3 for each of the notes covered by the ALI # 3 bid. See Ervin Ex. 78 at 22652. The winning bid in Brocks’ version of the optimization report yielded $2,554,001.00 less revenue than the ALI #3 bid. See id. Fan responded to Brocks’ fax by telephone. Tr. 10/30/03 PM at 107, In. 7-8. Fan stated that while he understood what Brocks was trying to do, Brocks’ calculations would have to consider the effect of bid floors and other bids to get a truly correct answer. Id. at 107, In. 11-16. Brocks did not take any further actions regarding the West of Mississippi bid results following this conversation with Fan. Id. at 107, In. 23 — 108, In. 1. Brocks did not inform anyone of his fax (or its substance) other than Fan and one junior Hamilton employee. Tr. 10/30/03 PM at 108, In. 7, 22-109; Tr. 10/31/03 AM at 172, In. 6-13. d. Post-Auction Review of West of Mississippi Sale HUD required Hamilton to submit a post-auction review of each sale, including the West of Mississippi sale. Hamilton Ex. 8 at p. C-2, ¶ l.g. One purpose of the post-auction review was to “document what actually transpired in the [West of Mississippi] sale, and present suggestions for consideration in future sales based on the experiences of the [West of Mississippi] Sale.” Hamilton Ex. 167 at H/SM 8939. The West of Mississippi sale occurred in September 1995, but Hamilton did not submit the post-auction review to HUD until August 22, 1996, two weeks after the North and Central Note Sale. See Hamilton Ex. 167. When Hamilton submitted its initial post-auction review of the West of Mississippi sale, it did not disclose the problems associated with the optimization model that required two separate runs, the latter involving a “temporary fix.” See Hamilton Ex. 167 at 15. In the section entitled “Lessons Learned,” Hamilton stated, “[b]oth during the [West of Mississippi] Sale and immediately thereafter, members of the Sale Team presented ideas for enhancing the loan sales program.” Id. at 17. The document did not disclose the communications between Robinson and Schindler about the need to fix the optimization model so that it would properly calculate bid floors in future sales or the communications between Brocks and Fan. 2. The North and Central Note Sale a. Bell Labs Applies Wrong Model Almost one year after the West of Mississippi sale, Hamilton held the North and Central note sale on August 5-6, 1996. Ervin Ex. 77 at 4-5, ¶ 18. As in the West of Mississippi sale, bidders in the North and Central sale were permitted to designate floors expressed in terms of the unpaid principal balances of mortgages. Id. Likewise, the bids were also analyzed by a Bell Labs’ optimization model. Id. ¶ 41. Subsequent to the West of Mississippi sale, Bell Labs created an unpaid principal balance model. Tr. 7/19/2004 AM at 48, In. 1-7. The original revenue model was not destroyed, however. Instead Bell Labs kept both models. Id. at 49, In. 3-13. Robinson left Hamilton- in January 1996. Tr. 10/31/2003 PM at 139, In. 23-24. Schindler suffered a heart attack shortly after the West of Mississippi sale. Tr. 7/19/2004 at 48, In. 17-25. Neither Robinson, nor Schindler were involved in the North and Central Note Sale, and neither informed anyone at Hamilton or Bell Labs of the new model. Id. at 49, In. 5-9. Robinson was not even aware that there was a new model, as he only was informed of the temporary fix by Schindler at the time of the West of Mississippi sale and made no further inquiries. See Ervin Ex. 77 at 3-4, ¶¶ 7-12; Tr. 10/31/2003 PM at 155, In. 24 — 156, In. 5. Hamilton provided data from the North and Central sale bids to Bell Labs with the instructions to run the same model as was used in the West of Mississippi sale. Tr. 7/19/2004 AM at 49, In. 10-13. The Bell Labs employees in charge of running the optimization model applied the original revenue model to the North and Central sale bids. ,Id. New to the multi-family loan sales project, the Bell Labs employees were unaware of both the temporary fix required to convert the revenue model into an unpaid principal balance model during the West of Mississippi sale and of the subsequent creation of the new unpaid principal balance model. See Ervin Ex. 77 at 4, ¶¶ 17-18. As Kevin McMahan, a Hamilton employee in charge of investigating the multifamily mortgage sales, testified, “they simply pulled the wrong one off the shelf and ran it.” Tr. 7/19/2004 AM at 49, In. 5-13.. b. Hamilton Reports Results to HUD Hamilton provided the results to Cush-man & Wakefield, HUD’s financial advisor on the North and Central sale. Ervin Ex. 77 at 5, ¶ 18; Ervin Ex. 92 at 12, ¶ 46. HUD awarded the mortgage loans based on the results reported by Hamilton. Er-vin Ex. 77 at 5, ¶ 19; Ervin Ex. 92 at 12, ¶ 47. The results reported by Hamilton were $1,511,244.00 less than optimal, however, because the revenue model was used instead of the unpaid principal balance model. Ervin Ex. 77 at 1. D. Single Family Note Sales 1. Single Family # 1 Note Sale Hamilton also conducted single family mortgage note sales on behalf of HUD, including the Single Family #1 Note Sale, held on October 25, 1995. Ervin Ex. 77 at 4, ¶ 14; Hamilton Ex. 169. The goals for the Single Family # 1 sale were to (1) maximize proceeds, (2) maximize negative credit subsidy, (3) reduce the HUD-held inventory; and (4) conduct a competitive auction providing equal opportunity to large and small investors. Hamilton Ex. 229 at HUD/KK 496. Shortly after the sale concluded, Hamilton presented the Single Family # 1 sale bid results to HUD. Hamilton Ex. 228. HUD declined to accept the bids for all of the assets because the amount offered was below HUD’s threshold credit subsidy price, which had not been published to bidders. Ervin Ex. 233; Tr. 10/31/2003 PM at 165, In. 5-23; Tr. 7/19/2004 at 30, In. 1-6. Had HUD accepted the bids for all the loans in the portfolio, HUD would have been required to receive a Congressional appropriation to make up for the shortfall. Tr. 7/20/2004 at 137, In. 1-5. To avoid the appropriation, HUD accepted bids for only 9,907 (of the 14,499) loans offered for sale, which resulted in a negative credit subsidy. See Ervih 233; Tr. 7/19/2004 at 30, In. 17 — 31, In. 18. HUD subsequently reoffered the ■remaining loans so as not to forfeit all the due diligence costs and the expense of conducting a sale. Tr. 7/19/2004 at 30, In. 17 — 31, In. 18. 2. Single Family # 1 Reoffering On November 6, 1995, HUD reoffered the remaining loans, advising bidders that it had established a floor price equal to 74% of the unpaid principal balance of the loans being reoffered and reserving the right to accept or reject any and all bids if that floor price was not met. Ervin Ex. 233 at 2342. HUD did not receive any adequate offers to purchase the entire lot and was required to select from among several partial bid packages. Tr. 7/19/2004 at 32, In. 7-14; Hamilton Ex. 231. On or about November 7, 1995, Hamilton presented to HUD four potential award options for the Single Family # 1 Reoffering. Tr. 10/31/2003 PM at 173, In. 8 — 174, In. 21; see Hamilton Ex. 231. For each alternative, the slides listed: (1) the number of mortgage notes that would be sold; (2) the unpaid principal balance of the notes sold; (3) the gross proceeds to be received; (4) the gross proceeds as a percentage of unpaid principal balance; and (5) the credit subsidy that would be generated. Hamilton Ex. 231. None of the options was superior to the others in all of the categories. See id. Option # 1 was for 73.11% of the unpaid principal balance of the loans being reoffered, resulting in a positive credit subsidy of $2,295,507. Hamilton Ex. 228 at 508. Option # 4 was for 76.11% of the unpaid principal balance of the loans being reoffered, resulting in a negative credit subsidy of $645,837. Id. at 511. Hamilton recommended that HUD select “Option # 4,” the option with the highest negative credit subsidy. Tr. 7/20/2004 at 137, In. 6-11; id. at 193, In. 25 — 194, In. 2; id. at 194, In. 14-20; Tr. 7/19/2004 at 33, In. 19-22. Contrary to Hamilton’s recommendation, Fair Housing Authority Commissioner, Nicolas Retsinas, chose Option # 1 — the option that sold the most loans and had the highest revenue, but resulted in a positive credit subsidy. Id. at 194, In. 3 — 195, In. 3; id. at 137, In. 13 — 138, In. 11; Tr. 7/19/2004 at 33, In. 6-11; id. at 34, In. 3-9; Tr. 7/21/2004 at 227, In. 4-8; Hamilton Ex. 231. Helen Dunlap testified that while the selection involved balancing competing policy interests, for HUD, selling the greatest number of loans was paramount. Tr. 7/20/2004 at 138, In. 7-8. The winning bidders in the Single Family # 1 Reoffering were a team comprised of BlackRock Capital Finance (“Black-Rock”) and Goldman Sachs and Company (“Goldman Sachs”). Hamilton had no business relationship with Goldman Sachs at the time of the Single Family # 1 Reof-fering sale. Tr. 7/19/2004 at 27, In. 10-12; Tr. 10/30/2003 PM at 123, In. 21-22. There was at least one conversation between a Hamilton employee and a Goldman Sachs employee about the possibility of Hamilton and Goldman Sachs working together on potential new business. Tr. 10/30/2003 PM at 121-23. Hamilton employed BlackRock as a subcontractor on another loan sale, known as the Partially Assisted Loan Sale. Id. at 131, In. 1-14; Tr. 7/19/2004 at 26, In. 6-12; Tr. 10/30/2003 PM at 119, In. 3-11. BlackRock did not bid on the Partially Assisted Loan Sale. Tr. 10/30/2003 PM at 131, In. 19-23. BlackRock did bid on and win assets in other note sales, including the Single Family # 1 Reoffering. Id. at 119, In. 3-11. HUD was aware of both BlackRock’s subcontract with Hamilton and the fact that BlackRock was a bidder on other loan sales, including the single family note sales. Tr. 7/21/2004 at 224, In. 20 — 225, In. 6; Tr. 7/19/2004 at 26, In. 3-15; Tr. 10/30/2003 PM at 131, In. 1-18. In light of this information, HUD discussed with Hamilton the proper steps to ensure that BlackRock did not have access to information on sales where BlackRock might have bid. Tr. 7/21/2004 at 225, In. 7 — 226, In. 16. Grace Huebscher testified that it was neither uncommon nor improper in the industry for a competitor to team as a subcontractor on some loan sales and bid on others. Tr. 10/30/2003 PM at 133, In. 24 — 134, In. 3. Hamilton did not have any other business relationships with Black-Rock during the course of the Single Family # 1 Reoffering. Tr. 7/19/2004 at 26, In. 16-18. E. Crosscutting Task Order 1. The Second Financial Advisory Contracts In March 1995, HUD solicited competitive offers to acquire the services of a group of replacement financial advisors to succeed Hamilton under the first financial advisor contract. Tr. 10/29/2003 PM at 53, In. 11 — 55, In. 14. Contracts were awarded to multiple firms, including Hamilton and Cushman & Wakefield.' Id. The second financial advisory contracts were indefinite delivery-indefinite quantity contracts. Id. at 55, In. 13-14. 2. Drafting the Crosscutting Task Order In the early stages of the first financial advisory contract, Hamilton suggested that HUD would benefit from having a crosscutting financial advisor to look across HUD’s different portfolios and help advise the agency on how to dispose of its loans. Tr. 7/20/2004 at 142, In. 22 — 143, In. 8; Tr. 11/3/2003 AM at 299, In. 3-20. The idea of the crosscutting role was shared among the various HUD offices, including HUD’s contracting office. Tr. 7/19/2004 at 38, In. 1-16; see also id. at 35, In. 7 — 36, In. 5. The original crosscutting concept involved HUD hiring additional in-house staff to provide advice on the financial management of HUD’s disparate portfolios. Er-vin Ex. 22. Due to HUD’s staffing shortages and the accelerating pace of the loan sales program, however, the agency chose to out source the crosscutting function. Tr. 7/20/2004 at 143-146; Tr. 7/19/2004 at 36, In. 12-24. On January 22, 1996, HUD prepared a Form 718 Funds Reservation and Contract authority form projecting the cost of the crosscutting task order at $5,000,000.00 per year. Ervin Ex. 172. Fair Housing Authority Comptroller, Kathy Rock, created a first draft of the crosscutting task order after reviewing old task orders, soliciting input from other HUD employees and receiving input from Hamilton’s Fair Housing Authority project manager Kevin McMahan. Tr. 7/21/2004 at 228, In. 1-10. Rock then circulated her draft to various HUD staff members. Id. at In. 11-23. After receiving comments, Rock submitted the final draft to HUD’s Office of Procurements and Contracts to issue the appropriate requests for proposals. Id. at 229, In. 1-7. 3.Evaluation of Crosscutting Task Order Technical Proposals In February 1996, HUD sent requests for proposals to Hamilton, Cushman & Wakefield, First Boston and Ernst & Young, each of whom had .been' awarded separate financial advisory contracts through a competitive bid process. Id. at 230, In. 15-18; Ervin Ex. 262. Two of the financial advisors, Hamilton and Cushman & Wakefield, submitted proposals. Tr. 10/29/2003 PM at 58, In. 18-22, id. at 59, In. 19-24. Hamilton bid a fixed basis point price of $20,842,000.00 over two years. Hamilton Ex. 7. Cushman & Wakefield bid a fixed basis point price of $8,258,000.00 over two years. Ervin Ex. 258 at 10832. HUD convened a Technical Evaluation Panel to review the submissions. Ervin Ex. 133 at HUD 075 00768. The panel determined that Hamilton’s proposal was technically stronger than Cushman & Wakefield’s, proposal and unanimously recommended awarding the. task order to Hamilton in its March 22,1996 report. Tr. 7/21/2004 at 232, In. 4-10; Ervin Ex. 133 at HUD 075 00768 — 075 00772. Upon further questioning by contract officer Hancock, Rock testified that she informed Hancock that Cushman & Wakefield’s proposal was technically unacceptable because it appeared to be in response to a solicitation for financial advisory work on a single sale, rather than a proposal to manage the overall program. Tr. 7/21/2004 at 233, In. 16-25; id. at 236, In. 24 — 237, In. 10. Hancock subsequently asked the Panel to review its findings and “be clear what characterization you would give each firm’s proposal as it relates to whether or. not their proposal is an acceptable one or not.” Tr. 10/29/2003 PM at 62, In. 18 — 63, In. 1. The Panel submitted a revised report to Hancock, dated April 25, 1996, stating that the Cushman & Wakefield proposal was technically unacceptable and explaining the Panel’s rationale. Id. at 63, In. 2-10; Ervin Ex. 134 at HUD 075 00764 — 075 00765. Hancock accepted the panel’s recommendation and passed it on to her supervisor for review. - Tr. 10/29/2003 PM at 73, In. 7-16. HUD’s Office of the Inspector General also met with Panel members, including Rock, to discuss the panel’s recommendation and basis for Hamilton’s selection. Tr. 7/21/2004 at 235, In. 3-12. 4. Award of Crosscutting Task Order to Hamilton Hancock subsequently met with Hamilton representatives to discuss clarifications and revisions , to the scope of work in advance of HUD issuing the Crosscutting Task Order. Tr. 7/19/2004 at 40, In. 18— 41, In. 8; Tr. 11/3/2003 AM at 336, In. 19-21; Ervin Ex. 142. During the meeting, the group discussed price, the specific language of the task order, and how Hamilton would develop a project plan. Tr. 11/3/2003 AM at 336, In. 22 — 337, In. 1. After the meeting, Hamilton employee Kevin McMahan e-mailed Hancock a black-lined revised statement of work for the crosscutting task order based on the discussions during the meeting. - Tr. 7/19/2004 at 43, In. 15-44, In. 13; Ervin Ex. 142. HUD’s Office of Procurements and Contract incorporated the changes and issued the task order to Hamilton on or about April 25, 1996. Hamilton Ex. 7. The task order provided that Hamilton would be paid $20,842,000.00 over two years,, to be paid in monthly installments of $868,417.00. Id. F. Original Source 1. Ervin’s Qui Tam and Bivens Actions On June 6, 1996, Ervin filed in the instant qui tam action a Complaint naming Hamilton as a defendant based, inter alia, on allegations surrounding the West of Mississippi sale. Specifically, Ervin alleged that Hamilton misapplied a defective optimization model. Hamilton Ex. 3 ¶ 13. Ervin alleged that the computer “optimization model” contained major flaws that resulted in an unfair advantage to certain bidders — bidders who were ultimately improperly awarded mortgages under the note sales. See Ervin’s Orig. Compl. ¶ 80 [Dkt. No. 1], Ervin’s original qui tam complaint also alleged corruption in the award of the crosscutting task order, including the improper rejection of Cushman & Wakefield’s lower bid on erroneous grounds of technical unacceptability. Id. ¶¶ 101-04. The Bivens complaint alleged fraud in connection with- procurements Er-vin had bid on or attempted to bid on or had participated in indirectly; specifically, Hamilton’s procurement of HUD contracts and financial advisory work, including the Williams, Adley 8(a) contract, the first financial advisory contract and the crosscutting task order. See Bivens Compl. ¶¶ 239-41, 311-12, 543-45. As part of its required disclosures in connection with the qui tam case, Ervin provided the Government with information related to the crosscutting task order and Hamilton’s subcontracts with Williams, Adley. See Ervin’s Written Disci, of Mat. Evid. At trial, the HUD Inspector General witnesses, Rudolph Joseph Haban and Judith Hetherton, each stated that their investigations of the allegations in Ervin’s qui tam complaint and in the Bivens action occurred only after Ervin supplied the government with copies of the lawsuits and related documents. See Tr. 11/3/03 PM at 219, In. 2-7, 257, In. 5-10, 268, In. 5-19. Hamilton does not dispute that the government investigated allegations against Hamilton only after the filing of Ervin’s lawsuits. See Compl., Hamilton Sec. Group, et al. v. Ervin & Assocs., D.C. Superior Court Civ. Action No. 99-0003864 (June 4, 1999) at 6, ¶ 22 (“In August 1996, the HUD Office of the Inspector General opened civil and criminal investigations, ostensibly in response to various of Ervin’s allegations.”). 2. The Coopers & Lybrand Fax During discovery in the qui tam and Bivens actions, Ervin obtained a copy of the fax from Brocks to Fan, dated September 25, 1995, and provided this fax to the government on June 23, 1998. See Tr. 11/3/03 PM at 220, In. 18-19: Prior to receiving it from Ervin, the government did not question either Brocks or Fan about Brocks’s fax. See Tr. 11/3/2003 PM at 222, In. 3 — 225, In. 21; Hamilton Exs. 169, 200. 3. The Manhattan Project On or about October 24, 1996, after Er-vin filed its original qui tam and Bivens complaints and the government began its investigation of Hamilton, a Hamilton employee, Rick Wolfe, discovered an inconsistency between the terms of the National Performing Multifamily Sale bid package and the formula Bell Labs used to optimize the results in that and subsequent note sales. Ervin Ex. 77 at 2-3, ¶¶ 2-4,18. On November 11, 1996, an article appeared in the U.S. News and World Report criticizing Hamilton’s conduct of the note sales. See Hamilton Ex. 126. In November 1996, Hamilton assembled a team, nicknamed the “Manhattan Project,” to investigate the optimization results reported to HUD in the multifamily note sales. Tr. 7/19/2004 AM at 45, In. 2-13. Robinson was not part of the Manhattan Project team because he was no longer a Hamilton employee. Id. at 74, In. 12-17. Manhattan Project team members Michael Dietz and Kevin McMahon interviewed Robinson about his involvement in the West of Mississippi sale. . Id. at 74, In. 24 — 75, In. 11. The Manhattan Project team asked Bell Labs to re-run optimization computations regarding the National Performing sale, the West of Mississippi sale, and the North and Central sale. Ervin Ex. 77 at 5, ¶ 21. On December 20, 1996, Hamilton submitted a report to HUD officials Nicolas Retsinas and Kathy Rock, entitled “Report on Optimization.” Ervin Ex. 77. In the Report on Optimization, Hamilton explained that a discrepancy in the floor bid instructions conveyed to Bell Labs by Hamilton caused the West of Mississippi sale to generate revenue that was $2,372,307 less than optimal and the North and Central sale to generate revenue that was $1,511,244 less than optimal. Id. at 1; Tr. 10/31/03 AM at 194, In.. 10-17. The Report on Optimization did not reveal to HUD that Brocks had identified to Fan a potential problem with the optimization results after the West of Mississippi sale. Tr. 10/31/03 AM at 200, In. 9-14; Ervin Ex. 77. 4. HUD Terminates Hamilton’s Contract On October 17, 1997, Nicolas Retsinas requested that HUD’s Office of Procurement and Contracts terminate Hamilton’s contract and take all appropriate actions to recover from Hamilton the lost revenue caused by Hamilton’s errors on the West of Mississippi and North and Central sales. See Hamilton Ex. 26. Upon learning of Hamilton’s errors in the West of Mississippi and North and Central sales, HUD’s contracting officer Annette Hancock consulted with her superiors and legal counsel and subsequently terminated Hamilton’s contract. Tr. 10/30/03 AM at 97, In. 4-20. II. CONCLUSIONS OF LAW • [1] The False Claims Act, 31 U.S.C. § 3729 et seq. (“the Act”) authorizes damages for “reverse false claims.” A reverse false claim may be sustained against one who “knowingly makes, uses, or causes to be made or used, a false record or statement to conceal, avoid, or decrease an obligation to pay or transmit money or property to the government.” 31 U.S.C: § 3729(a)(7). Generally, in order to prevail on a reverse false claim, a relator must sustain its burden of proving by a preponderance the following eight elements: (1) the Relator is the original source; and the Defendant (2) Knowingly (3) Made, Used, or Caused to be Made or Used; a (4) Record or statement that was (5) False (6) To a material fact; that (7) Damages were suffered by the United States through the concealment, avoidance,, or decrease of an obligation to pay or transmit money or property to the Government; and that (8) the Defendant was the direct cause of the damages. See John Boese, Sample Jury Instructions in a Qui Tam Case, App. F., p. F-30 (collecting cases). The parties agree that seven of the elements apply to this case. They disagree, however, as to the whether materiality is a required element. Ervin argues that “[m]ateriality is not a required element” in a False Claims Act action. Ervin’s Pr. Find./Concl. at 36-38 [Dkt. No. 405]. The Court rejects this argument. The great weight of case law holds that the materiality of a false record or statement is an element of False Claims Act liability. See, e.g., United States v. Data Translation, Inc., 984 F.2d 1256, 1267 (1st Cir.1992) (holding that a false statement that is not material does not support liability under the posb-1986 False Claims Act); Tyger Constr. Co. v. United States, 28 Fed. Cl. 35, 55 (1993) (holding that “the FCA covers only those false statements that are material”); United States v. Intervest Corp., 67 F.Supp.2d 637, 646 (S.D.Miss.1999) (stating that “the False Claims Act imposes a materiality requirement”). But see United States ex rel. Roby v. Boeing Co., 184 F.R.D. 107, 112 (S.D.Ohio 1998) (holding without explanation that in light of the Supreme Court’s decision in United States v. Wells, 519 U.S. 482, 117 S.Ct. 921, 137 L.Ed.2d 107 (1997), there is no separate materiality requirement under the False Claims Act). The Supreme Court, in two recent opinions, established a three-part test for determining whether materiality is an element of a federal statute. See Neder v. United States, 527 U.S. 1, 119 S.Ct. 1827, 144 L.Ed.2d 35 (1999); United States v. Wells, 519 U.S. 482, 117 S.Ct. 921, 137 L.Ed.2d 107 (1997). If Congress has not explicitly legislated materiality as an element of the offense materiality can be inferred, provided that the common law at the time the statute was enacted demonstrates a well-settled meaning of a term used by Congress for which materiality was an element. Neder, 527 U.S. at 21-22, 119 S.Ct. 1827. If a term used by Congress had a well-settled meaning which included materiality, the court presumes that Congress intended to incorporate materiality. Id. The Congressional presumption may be rebutted if the text or structure of the statute demonstrates that implying a materiality requirement is inconsistent with the language of the statute. Id. at 23-24, 119 S.Ct. 1827. Although instructive, neither of these decisions specifically addressed the materiality requirement under the False Claims Act. The Southern District of Texas, in United States ex rel. Wilkins v. North Am. Constr. Corp., 173 F.Supp.2d 601 (S.D.Tex. 2001), conducted an exhaustive analysis of the False Claims Act in light of Wells and Neder. See Wilkins, 173 F.Supp.2d at 618-30. The court concluded that materiality is an element of a civil False Claims Act action. The meaning of the terms used in the relevant provisions supports the conclusion that “false or fraudulent claim” includes an implicit requirement of materiality under the FCA. Although a “false claim” is not identical to a “fraudulent claim,” neither the statute, its legislative history, nor the case law supports a reading that dispenses with a showing of materiality for one but requires it for the other. Liability for both a “false claim” and a “fraudulent claim” implicitly requires a showing that what makes the claim either “false or fraudulent is material to the asserted claim of entitlement to receive money or property from the government.” Id. at 630. The court observed that “[t]he False Claims Act is a statutory cause of action intended from its inception to combat fraud against the government.” Id. at 619. The court further stated that “[t]he common law definitions of ‘false,’ ‘fraudulent’ and ‘claim’ and the manner in which ‘false claim’ was used in common law jurisprudence are consistent with implicitly including materiality as an element of the FCA.” Id. at 628. The court included reverse false claims under Section 3729(a)(7) because Congress intended that section to treat “an individual who makes a material misrepresentation to avoid paying money owed to the Government ... as if he submitted a false claim to receive money.” Id. at 630 (quoting S. Rep. no. 99-345, at 18, U.S.Code Cong. & Admin.News 1976, p. 5266). The Court is persuaded by the Wilkins Court’s well reasoned analysis. The Court, thus, proceeds to analyze whether Ervin sustained its burden on the eight requisite elements for each of the four remaining claims. A. The North and Central Note Sale 1. Original Source By statute, there is no jurisdiction over a qui tam action “based upon the public disclosure of allegations or transactions ... unless ... the person bringing the action is an original source of the information.” 31 U.S.C. § 3730(e)(4)(A). The Act defines “original source” as an individual who has direct and independent knowledge of the information on which the allegations are based and has voluntarily provided the information to the government before filing an action. 31 U.S.C. § 3730(e)(4)(B). “Direct knowledge” is knowledge “ ‘marked by the absence of intervening agency.’ ” United States ex rel. Alexander v. Dyncorp, Inc., 924 F.Supp. 292, 300 (D.D.C.1996) (citation omitted). “Independent” .means that the relator’s knowledge is not dependent on public disclosures. Id. These jurisdictional requirements serve to ensure that the Act’s rewards are available only where, at the time the qui tam claims were filed, the federal government was not already “on the trail” of the alleged wrongdoing. See United States ex rel. Fine v. Sandia Corp., 70 F.3d 568, 571 (10th Cir.1995) (citing United States ex rel. Springfield Terminal Ry. Co. v. Quinn, 14 F.3d 645, 655 (D.C.Cir.1994)). The Court’s May 1, 2003 Order reviewed the three requirements as applied to the facts alleged and concluded “that Ervin’s pleadings reflect compliance with the jurisdictional requirements of § 3730(e)(4), sufficient to withstand the present motion to dismiss [Ervin’s] claims.” During trial, it remained incumbent upon Ervin to demonstrate that the original source requirements are satisfied. a. D.C. Circuit Law This Circuit has adopted a two-part test to assess the qualification of a qui tam relator under § 3730(e)(4). The reviewing court must first determine whether the “allegations or transactions” that form the basis for the suit were publicly disclosed “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.” 31 U.S.C. § 3730(e)(4)(A). If the answer to that question is affirmative, the court will continue with the “original source” inquiry. See Springfield Terminal Ry. Co., 14 F.3d at 651. This court’s May 1, 2003 Order concluded that Ervin’s allegations are “based upon” publicly disclosed information; thus, the key inquiry is whether Er-vin is the “original source.” As mentioned above, in order to qualify as an “original source,” Ervin must have demonstrated at trial that it had “direct” and “independent” knowledge of the fraud, and that it “voluntarily” provided information to the United States. I. Direct Knowledge A relator has “direct knowledge” of any information gleaned from direct observation and analysis, as that information was acquired without any “intervening agency.” Alexander, 924 F.Supp. at 300. Courts have allowed a plaintiff to proceed with a qui tam suit based on information uncovered during an investigation undertaken by that same plaintiff. For example, in Springfield Terminal Ry. Co., the D.C. Circuit held that the plaintiff qualified as an original source when it obtained essential information through “its own efforts and experience, which ... included personal knowledge of the [ ] proceedings and interviews with individuals and businesses identified in the [] records.” 14 F.3d at 657. Similarly, Ervin’s investigation of the alleged impropriety involving the note sales was facilitated by its prior experience with HUD and its expertise in housing matters. See also Cooper ex rel. United States v. Blue Cross & Blue Shield of Fla., Inc., 19 F.3d 562, 568 (11th Cir.1994) (finding “direct knowledge” when relator acquired information through three years of his own research prior to public disclosure); United States ex rel. Stinson, Lyons, Gerlin & Bustamante, P.A. v. Prudential Ins. Co., 944 F.2d 1149, 1161 (3d Cir.1991) (stating that plaintiffs may qualify as relators if their information results from their own investigations); Lamers v. City of Green Bay, 998 F.Supp. 971, 983 (E.D.Wis.1998) (noting that “an ‘investigation’ undertaken at the relator’s own initiative may form the basis for a qui tam action.”). Ervin maintains that it satisfies the “direct knowledge” requirement because, through personal observation and analysis, and through its own research and investigation, it acquired knowledge of Hamilton’s fraudulent conduct. Ervin’s uncontroverted contention that its own investigatory efforts led to the filing of the qui tam and Bivens actions was buttressed by the testimony of the HUD Inspector General witnesses, both of whom admitted that their investigation of Hamilton stemmed from the allegations in Er-vin’s qui tam and Bivens complaints. See Tr. 11/3/03 PM at 219, ¶¶2-7, 257, ¶¶5-10, 268, ¶¶ 5-19; see also Compl., Hamilton Sec. Group, et al. v. Ervin & Associates, D.C. Superior Court Civ. Action No. 99-0003864 (June 4, 1999) at 6, ¶22. ii. Independent Knowledge There remains the question of whether the evidence introduced at trial showed that the allegations in the Second Amended Complaint were based on knowledge “independent” of any public disclosures. Typically, the jurisdictional bar applies where the publicly disclosed information “ ‘could have formed the basis for a governmental decision on prosecution, or could at least have alerted law-enforcement authorities to the likelihood of wrongdoing....’” Springfield Terminal Ry. Co., 14 F.3d at 654 (quoting United Sates ex rel. Joseph v. Cannon, 642 F.2d 1373, 1377 (D.C.Cir.1981)). As the D.C. Circuit stated in United States ex rel. Findley v. FPC-Boron Employees’ Club, 105 F.3d 675 (D.C.Cir.1997), “the public disclosure bar [ ] limits qui tam jurisdiction to those cases in which the relator played a role in exposing a fraud of which the public was previously unaware.” Id. at 678. This Circuit has recognized, however, that Congress has not specified “by mathematical formulae the quantum or centrality of nonpublic information that must be in the hands of the qui tam relator in order for suits to proceed.” Springfield Terminal Ry. Co., 14 F.3d at 653. The “direct and independent knowledge” requirement “refers to direct and independent knowledge of any essential element of the underlying fraud transaction_” Id. at 657 (emphasis in original).. To be sure, between Ervin’s June 1996 filing of its original qui tam complaint, and its filing of the Second Amended Complaint in September 1999, Ervin, Hamilton, and HUD OIG were all investigating possible errors or impropriety involving the optimization model. During this time period, Ervin continued its investigation of the note sales by conducting its own research, including several FOIA requests. Some of these requests piggy-backed upon other disclosures that had been made: for example, after more specific allegations of bid-rigging were made in a newspaper article that ran in The Washington Times on October 20, 1997, Ervin directed a FOIA request to HUD, requesting documents and other information referenced in the article. See May 1, 2003 Mem. at 13. It appears that at least some of the allegations in the Second Amended Complaint were supported by information that-was publicly disclosed. Ervin argues, however, that it is entitled to proceed as a relator based on the allegations in its original qui tam complaint, which it argues were “independent” of any public disclosures. Ervin’s original complaint alleged that Hamilton had acted improperly by misapplying a flawed optimization model, and by misleading the public about the fairness of the auctions. Orig. Compí. at ¶¶ 13, 79-85 [Dkt. No. 1]. The Written Disclosure of Material Evidence Pursuant to 31 U.S.C. § 3730(B)(2), which was filed with the original complaint, explains that the allegations regarding the optimization model were supported by a “[c]opy of the mathematical formula for the optimization model [and by] Ervin’s analysis of the optimization model.” Er-vin’s Written Disci, of Mat. Evid. at 3. Other allegations in the original complaint were similarly supported by individual sources, documentary evidence, and Er-vin’s analysis. Id. To the extent that Er-vin may have relied on facially innocuous documents obtained under FOIA, such “disclosures” do not necessarily bar qui tam jurisdiction. As the D.C. Circuit explained in Springfield, Knowledge of the allegedly misrepresented state of affairs — which does not necessarily entail knowledge of the fact of misrepresentation — is always in the possession of the government.... Publication of the facially valid [documents], already in the government’s pocket, cannot by itself be sufficient to defeat qui tam jurisdiction. Indeed, the entire qui tam regime is premised on the idea that the government’s knowledge of misrepresented claims against the federal fisc (without knowledge that they are misrepresented) does not in itself translate into effective enforcement of the laws against fraud. 14 F.3d at 656 (emphasis in original). Therefore, although the government had physical possession of some of these documents and turned them over pursuant to FOIA requests, Ervin’s own analysis and research brought the allegedly fraudulent activity to the government’s attention. In other words, Ervin’s original complaint contained essential elements of the allegedly fraudulent transaction — it identified the alleged perpetrator, and the scheme in general terms. Although Ervin may have enhanced its case with subsequent public disclosures, its original complaint set the government “on the trail,” prompting an investigation of possible improprieties involving the auctions. Fine, 70 F.3d at 571. iii. Voluntarily Provided In order to qualify as an “original source,” a relator must have “voluntarily provided the information to the government before filing an action .... ” 31 U.S.C. § 3730(e)(4)(B). Senator Grassley, one of the authors of the 1986 Amendments, described the purpose of § 3730(e)(4)(B)’s disclosure requirement as follows: In the definition of ‘original source,’ the requirement that the individual ‘voluntarily’ informed the Government ... is meant to preclude the ability of an individual to sue under the qui tam section of the False Claims Act when his suit is based solely on public information and the individual was a source of the allegations only because the individual was subpoenaed to come forward. However, those persons who have been contacted or questioned by the Government ... and cooperated by providing information which later led to a public disclosure would be considered to have Voluntarily’ informed the Government ... and therefore considered eligible qui tam relators. 132 Cong. Rec. 20536 (1986). Ervin argues that it “provided the information to the government long before it filed its amended complaint and long before any alleged public disclosures.” Ervin’s Mem. in Opp. to Motion to Dismiss at 18 n.12. [Dkt. No. 140]. Ervin notes that “[t]he United States was served both with the original complaint and a Written Disclosure of Material Evidence in June 1996.” Id. In fact, Attachment 1 to Ervin’s Second Amended Complaint details the information that Ervin provided before filing the amended complaint. The record indicates that Ervin cooperated with the government (without need for a subpoena) and provided the government with information as it became available. See Tr. 11/3/03 PM at 219, In. 2-7, 220, In. 18-19, 257, In. 5-10, 268, In. 5-19. The Court concludes that because Ervin presented evidence sufficient to prove that it had direct and independent knowledge of the fraud alleged, and that it provided that information voluntarily to the United States, that it satisfied the jurisdictional requirements of § 3730(e)(4). 2. “Knowingly” (Scienter Requirement) To prove that Hamilton “knowingly” presented a false or fraudulent claim, Ervin must establish that Hamilton (1) ha[d] actual knowledge of the information; (2) act[ed] in deliberate ignorance of the truth or falsity of the information; or (3) aet[ed] in reckless disregard of the truth or falsity of the information. 31 U.S.C. § 3729(b). Concerning the North and Central sale, Ervin argues that Hamilton and its subcontractors “act[ed] with reckless disregard of the truth or falsity of the ... North/Central Sale Optimization Results.” Ervin’s Pr. Find./ Concl. at 32 (Nov. 12, 2003) [Dkt. No. 405]. The “reckless disregard” prong of the definition for the term “knowingly” as used in the False Claims Act, 31 U.S.C. 3729 et seq., was enacted in a 1986 amendment to the federal statutory code. As described by what appears to be the only congressional report accompanying the bill: S. 1562 defines this obligation as bo make such inquiry as would be reasonable and prudent to conduct under the circumstances to ascertain the true and accurate basis of the claim. Only those who act in gross negligence of this duty will be found liable under the False Claims Act. * % * * * the constructive knowledge definition attempts to reach what bias become known as the ostrich type situation where an individual has ‘buried his head in the sand’ and failed to make simple inquiries which would alert him that false claims are being submitted. While the Committee intends that at least some inquiry be made, the inquiry need only be ‘reasonable and prudent under the circumstances’, which clearly recognizes a limited duty to inquire as opposed to a burdensome obligation. S. Rep. 99-345, at 20, 1986 U.S.C.C.A.N. 5266, +5285 (internal quotation marks omitted). Reckless disregard, as used in the False Claims Act, “lies on a continuum between gross negligence and intentional harm.” United States v. Krizek, 111 F.3d 934, 941 (D.C.Cir.1997) (internal citation omitted) (emphasis added). As the D.C. Circuit noted in Krizek, the best reading of the Act defines reckless disregard as an extension of gross negligence. Section 3729(b)(2) of the Act provides liability for false statements made with deliberate ignorance. If the reckless disregard standard of section 3729(b)(3) served merely as a substitute for willful misconduct — to prevent the defendant from “deliberately blind[ing] himself to the con