overbilling | The Contracting Education Academy

March 16, 2021 By cs

Federal contractor agrees to pay more than $6 million to settle overbilling allegations

Virginia-based Information Innovators Inc. (Triple-I) has agreed to pay the United States $6.05 million to resolve allegations that a predecessor company, Creative Computing Solutions Inc. (CCSi), violated the False Claims Act by knowingly overbilling the U.S. Department of Homeland Security (DHS) for work performed by CCSi employees who lacked required job qualifications.

Triple-I, which provides IT services and solutions to federal agencies, acquired Maryland-based CCSi in 2015. CCSi formerly provided IT services to DHS pursuant to an Enterprise Acquisition Gateway for Leading Edge Solutions Contract (EAGLE contract). The settlement resolves allegations that, from October 2007 to April 2014, CCSi knowingly submitted claims for payment to DHS for work performed by CCSi employees who lacked required job qualifications. CCSi allegedly violated the terms of the EAGLE Contract by using under-qualified personnel who were billed to DHS at higher rates reserved for more qualified employees.

“Contractors that knowingly overcharge the government will be held accountable,” said Acting Attorney General Brian M. Boynton of the Justice Department’s Civil Division. “The department will ensure that that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with their contractual commitments.”

“Defense contractors are required to bill for costs actually incurred, and to be truthful in the claims they submit to federal agencies,” said Acting U.S. Attorney Jonathan F. Lenzner for the District of Maryland. “The U.S. Attorney’s Office and our partners are committed to protecting taxpayer dollars and ensuring integrity and compliance with federal agency standards.”

“DHS OIG remains committed to protecting government programs, and American taxpayers who contribute to them, from fraudsters,” said Inspector General Joseph V. Cuffari. “Our agency, working closely with our law enforcement partners, will continue to root out these unlawful contracting fraud schemes.”

The settlement was a result of a joint investigation by the DOJ’s Civil Division’s Commercial Litigation Branch (Fraud Section), the U.S. Attorney’s Office for the District of Maryland, and the Department of Homeland Security Office of the Inspector General’s Major Frauds and Corruption Unit. The claims resolved by the settlement are allegations only and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-more-6-million-settle-overbilling-allegations

July 4, 2019 By AMK

Shoddy contracting practices lead to overbilling at EPA

The Environmental Protection Agency is overpaying contractors due to poor contract management controls, according to an audit released Monday by the agency’s office of inspector general.

The audit—conducted from March 2018 to February 2019—examined 11 of 64 total invoices made through a single task order on a $100 million IT contract awarded in 2011 to SRA International following a response to an anonymous hotline complaint about invoices and payments. According to the audit’s “limited review,” all 11 invoices EPA IG tested within the task order “did not comply with contract requirements,” leading to an overbilling of more than $5,100 paid to the contractor.

“Our limited review noted $5,158.29 for an unallowable fixed fee billed and paid by the EPA,” the audit states. “However, without adequate review of all invoices submitted under [the task order], the EPA does not know whether there are further unallowable costs that it has paid for under the task order.”

The IG cites various reasons issues occurred, including staffing problems, high turnover, poor contract file management disorganization and inadequate oversight.

Keep reading article at: https://www.nextgov.com/it-modernization/2019/05/shoddy-contracting-practices-lead-overbilling-epa/157143/

December 12, 2018 By AMK

Oversight of U.S. military’s food suppliers called into question after fraud indictment

Executives from a company responsible for providing food and water for deployed U.S. troops in Afghanistan have been charged with defrauding the government and creating a fake construction site to overstate progress on an $8 billion contract, the Justice Department said in a recently filed indictment.

The allegations came four years after the company’s predecessor pleaded guilty to criminal charges that it inflated prices for basic items that it sold to the U.S. military. Both cases emphasize how the U.S. military has struggled to curb abuses of U.S. defense spending in America’s longest-running foreign war as the U.S. military presence in Afghanistan enters its 17th year, analysts said.

On Nov. 27, the Justice Department charged Abdul Huda Farouki, Mazen Farouki and Salah Maarouf — three Virginia residents who worked with a Dubai-based company called Anham Fzco — with defrauding the U.S. military under an estimated $8 billion military supply contract.

Keep reading this article at: https://www.washingtonpost.com/business/2018/12/08/oversight-us-militarys-food-suppliers-called-into-question-after-fraud-indictment/

June 15, 2018 By AMK

$20 million lawsuit settled alleging contractor falsely overcharged Navy for ship husbanding services

Inchcape Shipping Services Holdings Limited and certain of its subsidiaries (collectively, Inchcape) have agreed to pay $20,000,000 to resolve allegations that they violated the False Claims Act by knowingly overbilling the U.S. Navy under contracts for ship husbanding services, the Department of Justice has announced.

Inchcape is a marine services contractor headquartered in the United Kingdom.

Inchcape provided goods and services to Navy ships at ports in several regions throughout the world, including southwest Asia, Africa, Panama, North America, South America and Mexico. Inchcape provided ships with food and other subsistence items, waste removal, telephone services, ship-to-shore transportation, force protection services and local transportation. The lawsuit alleged that from 2005 to 2014, Inchcape knowingly overbilled the Navy for these services by submitting invoices that overstated the quantity of goods and services provided, billing at rates in excess of applicable contract rates, and double-billing for some goods and services.

“Federal contractors may only charge the government for costs allowed by their federal contracts,” said Acting Assistant Attorney General Chad A. Readler, head of the Justice Department’s Civil Division. “The Department of Justice will take action against contractors that knowingly submit inflated claims to the armed forces—or any other agency of the United States—as those inflated claims wrongfully divert taxpayer dollars.”

“We trust contractors supporting our warfighters to act with the utmost integrity and expect them to comply with their obligations to bill the government as called for by their contracts,” said U.S. Attorney for the District of Columbia Jessie K. Liu. “This settlement reflects our Office’s strong commitment to holding accountable those who violate these fundamental principles, no matter where they may be located.”

“This settlement demonstrates that the Department of the Navy will continue to hold contractors accountable for the agreements they make to supply our fleet,” said Secretary of the Navy Richard V. Spencer. “The Department expects strict adherence to higher standards within the Department and expects the same from its contractors.”

“Fraud is an abuse of the system that siphons resources away from the American warfighter,” said Jeremy Gauthier, Special Agent in Charge of the Naval Criminal Investigative Service’s Washington D.C. field office. “NCIS will continue to work with our law enforcement partners to hold responsible those who would put personal gain above corporate integrity.”

The lawsuit was brought under the qui tam, or whistleblower, provisions of the False Claims Act by three former employees of Inchcape, Noah Rudolph, Andrea Ford and Lawrence Cosgriff. Under the act, a private citizen may bring suit on behalf of the United States for false claims and share in any recovery. The government may intervene in the case, as it did here. The False Claims Act allows the government to recover treble damages and penalties from those who violate it. As part of today’s resolution, the whistleblowers will receive approximately $4.4 million.

The case was handled jointly by the Civil Division’s Commercial Litigation Branch and the U.S. Attorney’s Office of the District of Columbia, with assistance from the Department of the Navy and the Naval Criminal Investigative Service.

The case is captioned United States ex rel. Rudolph v. Inchcape Shipping Services Holdings Limited, et al., No. 1:10-cv-01109 (D.D.C). The claims alleged in the case are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/usao-dc/pr/united-states-settles-lawsuit-alleging-contractor-falsely-overcharged-united-states-navy

August 23, 2017 By AMK

Active-duty Navy commander pleads guilty to conspiring with foreign defense contractor to defraud Navy

The latest development in the years-long “Fat Leonard” Navy contract corruption scandal is a guilty plea by an active-duty U.S. Navy commander in connection with his efforts to obstruct a federal criminal investigation of the owner and chief executive officer of a multi-national defense contracting firm headquartered in Singapore.

The plea was entered last week by Bobby Pitts who served as the officer in charge of the Navy’s Fleet Industrial Supply Command (FISC) in Singapore.

This development is the most recent in a string of guilty pleas, indictments and convictions – spanning more than three years – related to alleged fraudulent activities of Glenn Defense Marine Asia (GDMA) and its chief executive, Leonard Glenn “Fat Leonard” Francis. So far, 27 individuals have been charged in connection with the corruption and fraud investigation into GDMA. Of those charged, at least 20 are current or former Navy officials and five are GDMA executives. Several additional cases are pending. Francis’ reputation for corruption and bribery in recent years has led him to be nicknamed “Fat Leonard.” (For background, see The Washington Post article, “The Man Who Seduced the 7th Fleet,” here.)

Bobby Pitts, 48, of Chesapeake, Virginia, pleaded guilty to one count of conspiracy to defraud the U.S. in connection with the NCIS’s investigation of Francis. Pitts is set to be sentenced on December 1, by U.S. Magistrate Judge Bernard Skomal of the Southern District of California, who accepted his plea on August 15, 2017.

According to admissions made as part of his plea agreement, Pitts, as part of his duties in Singapore during the period August 2009 to May 2011, learned that the Naval Criminal Investigative Service (NCIS) and several civilian employees of the Navy were investigating whether Francis was over-billing the Navy on ship husbanding contracts. Pitts had access to internal Navy documents pertaining to investigative steps that the Navy was considering and admitted that he shared this information with Francis, with the intent to impede and obstruct the Navy’s oversight of its contracts with GDMA. On Nov. 23, 2010, for example, Pitts forwarded to a representative of GDMA an internal Navy email discussing FISC’s intention to contact officials with the Royal Thai Navy to determine whether GDMA had been billing the U.S. Navy for services in fact rendered by the Thai government.

In pleading guilty, Pitts admitted, among other things, to working with Francis and other foreign-defense-contractor personnel to help them cover up GDMA’s overcharging practices with respect to providing protection to U.S. Navy forces deployed in the Western Pacific.

So far, 18 of 27 defendants charged in the U.S. Navy bribery and fraud scandal have pleaded guilty. All defendants are presumed innocent unless and until convicted beyond a reasonable doubt in a court of law.

The case is being prosecuted by the Fraud Section of the Justice Department’s Criminal Division and Assistant U.S. Attorneys from the Southern District of California.

Source: https://www.justice.gov/opa/pr/active-duty-us-navy-commander-pleads-guilty-conspiring-foreign-defense-contractor-defraud-us

For more information on this prosecution, see: http://contractingacademy.gatech.edu/?s=fat

The Environmental Protection Agency is overpaying contractors due to poor contract management controls, according to an audit released Monday by the agency’s office of inspector general.

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