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May 23, 2016 By AMK

Government settles False Claims Act charge against TVA contractor

The Justice Department, on behalf of the Tennessee Valley Authority (TVA), has reached a settlement with TVA contractor Bartlett Holdings, Inc. (Bartlett), d.b.a. BHI Energy/Sun Technical Services, over alleged violations of the False Claims Act. 

TVABartlett was alleged to have violated the False Claims Act by knowingly concealing or knowingly and improperly avoiding an obligation to refund over-payments received from TVA for work performed on the project to complete the construction of Watts Bar Nuclear Plant Unit 2.  Under the terms of the settlement, Bartlett agreed to pay the United States $2.8 million.

In January 2008, Bartlett entered into a subcontract with Bechtel Power Corporation, TVA’s engineering, procurement and construction contractor on the Watts Bar Unit 2 project, to furnish qualified personnel to Bechtel for the project.  Bartlett’s subcontract, which was funded by TVA, provided for Bartlett to be reimbursed its actual costs for wages and related expenses, including payroll taxes and insurance incurred for employees working on the project.  However, the United States alleged that Bartlett received payments from TVA in excess of actual costs for payroll taxes and insurance and knowingly failed to timely identify, report and refund those over-payments to TVA as required under the subcontract.

“The issue of losing public funds through fraud, waste and abuse is all too well known,” said Acting U.S. Attorney Nancy Harr.  “Since these losses usually result in increased costs to the public, parties that contract with the government or its agencies must be held to the terms of their contract.”

This settlement resulted from a joint, comprehensive investigation conducted by the U.S. Attorney’s Office and the TVA Office of Inspector General (TVA-OIG).  In January 2014, the TVA-OIG Audit Division initiated an audit of payments to Bartlett under its subcontract.  The U.S. Attorney’s office and TVA-OIG Investigations Division subsequently joined the investigation following the filing of a qui tam or whistleblower complaint in May 2014.

Members of the public are reminded that the claims settled by an agreement such as the one in this case are based on allegations only, and there has been no determination of liability.

Source: May 5, 2016 announcement by the Dept. of Justice at: https://www.justice.gov/usao-edtn/pr/united-states-settles-false-claims-act-allegations-against-tva-contractor-bartlett 

Filed Under: Government Contracting News Tagged With: abuse, DOJ, fraud, Justice Dept., overcharge, overpayment, qui tam, TVA, waste, whistleblower

February 6, 2015 By AMK

Pass-through contracts for war zones need monitoring, GAO finds

Three agencies working overseas that together spent $322 billion on contracting in fiscal 2013 need to improve guidance given contracting officers to reduce risk of overpayments, a watchdog found. Two-thirds of that money is funneled through prime contractors to smaller contractors who perform most of the work.

Use of pass-through contracts—under which at least 70 percent of funding is routed to subcontractors—requires new analysis and guidance before they are awarded, the Government Accountability Office noted in a Dec. 22, 2014 report.

“Concerns remain that the government could overpay contractors that provide no, or little, added value for work performed by lower-tier subcontractors,” GAO wrote.

The watchdog cited requirements imposed on the Defense and State Departments and the U.S. Agency for International Development under the 2007, 2009 and 2013 versions of the National Defense Authorization Act to reduce waste in purchasing goods and services primarily in Afghanistan.

Keep reading this article at: http://www.govexec.com/defense/2014/12/pass-through-contracts-war-zones-need-monitoring-gao-finds/102024/

Filed Under: Government Contracting News Tagged With: DoD, GAO, NDAA, overpayment, oversight, pass-through contracts, State Dept., USAID

August 27, 2014 By AMK

FEMA’s 50% rule costing gov’t hundreds of millions of dollars in overpayments

Hundreds of millions of dollars were lost due to a misinterpretation of a Federal Emergency Management Agency rule that funds the replacement or repair of facilities after a natural disaster, according to a recent Homeland Security Department inspector general report.

FEMA’s public assistance program provides financial assistance for people in the aftermath of hurricanes, earthquakes, tornadoes, floods and terrorists attack. The agency spends around $10 billion every year for the Disaster Relief Fund to help people rebuild after a natural disaster.

Under the 50 percent rule, FEMA will replace a facility if the estimated cost of repair exceeds 50 percent of the estimated cost to replace it.

But applying FEMA’s 50 percent repair or replace rule correctly can be very difficult and susceptible to error, misinterpretation and manipulation, the report dated Aug. 7 said.

Keep reading this article at: http://www.fiercehomelandsecurity.com/story/ig-femas-50-percent-rule-costing-govt-hundreds-millions-dollars-overpayment/2014-08-21

Filed Under: Government Contracting News Tagged With: contract payments, DHS, FEMA, IG, overpayment

August 22, 2014 By AMK

IG says Army paid too much upgrading Russian copters

U.S. Army contracting officers overpaid an American company upgrading Russian-made Mi-17 helicopters as contract costs increased almost 70 percent, according to an audit by the Pentagon inspector general.

The Army Contracting Command has responded that it will seek to recoup $128,990 of $151,543 in what the audit called “excess fees” paid since 2010 to Columbia, Maryland-based Science and Engineering Services Inc. The remaining $22,553 in fees was justified, according to the audit by the inspector general dated July 28.

While the amounts wouldn’t put a dent in the Pentagon’s $496 billion annual base budget, the inspector general’s report is the latest of three to question the contracting practices of an Army-run office set up in 2010 to manage the purchase and maintenance of foreign-made helicopters such as the medium-lift Mi-17 transport helicopters sold to U.S. allies Afghanistan, Pakistan and Iraq.

Keep reading this article at: http://www.bloomberg.com/news/2014-08-12/u-s-army-paid-too-much-upgrading-russian-copters-audit.html

Filed Under: Government Contracting News Tagged With: Army, audit, DoD, IG, overpayment, price reasonableness

February 18, 2014 By AMK

False Claims Act filing requirements trump shipping rule, whistleblower case reinstated

A federal appeals court has reinstated a whistleblower lawsuit brought in 2008 against shipping company DHL Express.

Kevin Grupp and Robert Moll alleged DHL improperly billed the federal government for jet fuel surcharges on ground shipments. DHL had won dismissal at the trial court, the federal court in Buffalo, but on Feb. 5 the U.S. Court of Appeals for the Second Circuit reversed that ruling.

Judge Ralph Winter authored the opinion for the Second Circuit. He wrote that a rule that requires challenges to shipping disputes to be brought within 180 days does not apply to False Claims Act cases.

“Application of the 180-day rule would completely nullify the tolling allowance as the Government is often unlikely to become award of fraud immediately following the violation,” Winter wrote.

Keep reading this article at: http://legalnewsline.com/news/federal-government/247130-false-claims-act-filing-requirements-trump-shipping-rule-whistleblower-case-reinstated 

Filed Under: Government Contracting News Tagged With: damages, False Claims Act, fraud, improper payment, overpayment, whistleblower

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