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November 12, 2018 By AMK

Northrop Grumman pays $27.5 million under False Claims Act

Nothrop Grumman Corp. on has agreed to forfeit $27.5 million under the False Claims Act while acknowledging that some employees inflated their work hours on bills for two battlefield communications contracts with the Air Force.

“Contractors that knowingly inflate their bills to the government will face serious consequences,” said Assistant Attorney General Joseph Hunt of the Justice Department’s Civil Division, in an announcement. “This settlement demonstrates, once again, that we will not tolerate those who falsely charge the armed forces or any agency of the United States to illegally profit at the expense of the American taxpayer.”

The Falls Church, Va.-based Northrop Grumman Systems Corp. agreed to settle over charges on the Air Force’s Battlefield Airborne Communications Node contract and the Dynamic Re-tasking Capability contract awarded during July 1, 2010, and Dec. 31, 2013. That action resolves allegations that the firm “billed the Air Force for labor hours purportedly incurred by individuals stationed in the Middle East who had not actually worked the hours claimed,” Justice said.

Keep reading this article at: https://www.govexec.com/contracting/2018/11/northrop-grumman-pays-2745-million-under-false-claims-act/152572

See Dept. of Justice announcement here: https://www.justice.gov/usao-sdca/pr/northrop-grumman-subsidiary-agrees-pay-3165-million-overbilling-us-air-force-civil-and

Filed Under: Government Contracting News Tagged With: Air Force, DCIS, DoD, DOJ, false claims, False Claims Act, FBI, inflated labor, Justice Dept., settlement

February 8, 2016 By AMK

Florida company pays $7.4 million to settle allegations of double-billing on contract in Iraq

Centerra Services International, Inc. has agreed to pay $7.4 million to resolve allegations that it violated the False Claims Act by double billing and inflating labor costs in connection with a contract for firefighting and fire protection services in Iraq, according to the Department of Justice. 

Justice Dept. sealCenterra, formerly known as Wackenhut Services LLC,  is a security services company headquartered in Palm Beach Gardens, Florida.

“Our military depends on the private sector – both prime contractors and subcontractors – to provide critical services to protect the health and safety of our men and women in uniform,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Those subcontractors who knowingly inflate the costs of these services, which are passed onto the government and the taxpayer, will face appropriate consequences.  [This] settlement demonstrates our continuing vigilance to ensure that our servicemen and women obtain the services they need at the price we bargained for.”

Wackenhut provided U.S. military bases with firefighting and fire protection services under a subcontract with Kellogg Brown & Root Inc. (KBR), the prime contractor for the Army’s contract for logistical support in the military theater, known as LOGCAP III.  LOGCAP III is the third generation of contracts under the Army’s Logistical Civil Augmentation Program.

The government alleged that from 2008 to 2010, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs.  The government further alleged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate.  Wackenhut billed KBR, which then passed on the costs to the government under LOGCAP III.

“Contractors are expected to comply with their statutory obligations and act in good faith when dealing with the U.S. government,” said Special Agent in Charge Janice M. Flores of the Defense Criminal Investigative Service (DCIS) Southwest Field Office.  “The DCIS is committed to working with its partner agencies, such as the U.S. Department of Justice, Defense Contract Audit Agency and the U.S. Army Criminal Investigation Command to ensure the integrity of the Defense Department’s procurement process.  This settlement demonstrates that combatting fraud, waste and abuse within Department of Defense contracting remains a top priority.”

This settlement resolves a lawsuit filed by whistleblower Gary W. Reno under the qui tam or whistleblower provisions of the False Claims Act.  The act permits private individuals to sue on behalf of the government those who falsely claim federal funds, or cause others to do so, and to receive a share of any funds recovered through the lawsuit.  Reno will receive $1.332 million as his share of the recovery.

This settlement was the result of a coordinated effort among the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office of the Eastern District of Texas, the Department of Defense Inspector General’s Office, the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

The case is captioned Reno v. Kellogg Brown & Root, Inc. and Wackenhut Services, LLC, et al., Case No. 1:10-CV-504 (E.D. Tex.).  The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: http://www.justice.gov/opa/pr/florida-based-centerra-services-international-inc-agrees-pay-74-million-settle-false-claims

Filed Under: Government Contracting News Tagged With: Army, DCAA, DoD, DOJ, false claims, False Claims Act, inflated labor, Justice Dept., LOGCAP, overbilling, qui tam, whistleblower

October 16, 2015 By AMK

Boeing pays $18 million to settle allegations of improperly charging labor costs

The Boeing Company has paid the United States $18 million to settle allegations that the company submitted false claims for labor charges on maintenance contracts with the U.S. Air Force for the C-17 Globemaster aircraft, the Justice Department has announced. 

Justice Dept. sealThe government alleged that Boeing improperly charged labor costs under contracts with the Air Force for the maintenance and repair of C-17 Globemaster aircraft at Boeing’s Long Beach Depot Center in Long Beach, California.  The C-17 Globemaster aircraft, which is both manufactured and maintained by Boeing, is one of the military’s major systems for transporting troops and cargo throughout the world.  The government alleged that the company knowingly charged the United States for time its mechanics spent on extended breaks and lunch hours, and not on maintenance and repair work properly chargeable to the contracts.

“Defense contractors are required to obey the rules when billing for work performed on government contracts,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “Today’s settlement demonstrates that the Justice Department will ensure that government contractors meet their obligations and charge the government appropriately.”

The allegations resolved by the settlement announced on October 14, 2015 were originally brought by former Boeing employee James Thomas Webb under the qui tam, or whistleblower, provisions of the False Claims Act.  The Act permits private individuals to sue on behalf of the government those who falsely claim federal funds, and to share in the recovery.  Mr. Webb’s share of the settlement has not yet been determined.

The case was handled by the Civil Division’s Commercial Litigation Branch, the Defense Criminal Investigative Service, the Air Force Office of Special Investigations, the Defense Contract Audit Agency and the Defense Contract Management Agency.

The False Claims Act lawsuit is captioned United States ex rel. Webb v. The Boeing Company, CV13-000694 (C.D. Cal.).  The claims resolved by this civil settlement are allegations only as there has been no determination of liability.

Boeing, an aerospace and defense industry giant, is headquartered in Chicago.

Source: http://www.justice.gov/opa/pr/boeing-pays-18-million-settle-false-claims-act-allegations

Filed Under: Government Contracting News Tagged With: Air Force, DCAA, DCIS, DCMA, DoD, DOJ, excessive labor charges, false claims, False Claims Act, inflated labor, Justice Dept., whistleblower

June 6, 2014 By AMK

Army to Seek Northrop refunds over inflated labor rates

The U.S. Army will press Northrop Grumman Corp. (NOC) for refunds after the Pentagon’s inspector general found the contractor charged the service inflated labor rates on programs to fight drug trafficking.

The Army Contracting Command will conduct its own audit “as soon as feasible” of Northrop’s billings and the resumes of subcontractor workers to determine how much money should be repaid, spokeswoman Giselle Lyons said in an e-mail.

Allegations in the report “are being further investigated by the U.S. Army Contracting Command,” she said. “The command is implementing the recommendations proposed to help ensure the proper management and oversight of current and future contract actions.”

Northrop, the fifth-biggest U.S. contractor, charged the Army excessive labor rates for almost six years for more than 300 subcontractor employees working in Afghanistan and in the U.S. on counter-narcotics efforts abroad, the inspector general said in a May 13 report labeled “For Official Use Only” and obtained by Bloomberg News.

Keep reading this article at: http://www.bloomberg.com/news/2014-05-29/army-to-seek-northrop-refunds-over-inflated-labor-rates.html

Filed Under: Government Contracting News Tagged With: Army, excessive labor charges, IG, inflated labor, labor rates, questionable costs, unallowable costs

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