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December 3, 2020 By cs

Contractor agrees to pay $18.98 million for alleged overcharges and use of unqualified labor

Cognosante LLC has agreed to pay the United States $18,987,789 to resolve allegations that it violated the False Claims Act by using unqualified labor and overcharging the United States for services provided to government agencies under two General Services Administration (GSA) contracts, the Justice Department. 

Cognosante, which is headquartered in Falls Church, Virginia, provides health care and IT services and solutions to federal agencies.

GSA’s Multiple Award Schedule (MAS) contracts allow the federal government to leverage its buying power to achieve favorable pricing.  Under MAS contracts, contractors negotiate with GSA to set maximum prices for goods and services subsequently ordered by agencies across the federal government.  These contracts provide streamlined access to the federal marketplace.

The settlement resolves allegations that Cognosante overcharged the United States for services performed under two GSA MAS contracts, including by providing false information concerning Cognosante’s commercial discounting practices during contract negotiations.  It also resolves allegations that Cognosante charged the United States for labor that failed to meet the qualifications in one of the contracts.

Cognosante investigated and disclosed to the United States the contractual violations resolved in the settlement.  It received credit for its disclosure and cooperation.

The settlement was the result of a joint investigation by the GSA OIG, the U.S. Attorney’s Office for the District of Columbia, and the Civil Division’s Commercial Litigation Branch.  The claims resolved by the settlement agreement are allegations only, and there has been no determination of liability.    

Source: https://www.justice.gov/opa/pr/federal-contractor-agrees-pay-1898-million-alleged-false-claims-act-caused-overcharges-and

Filed Under: Government Contracting News Tagged With: abuse, DOJ, false claims, False Claims Act, false information, fraud, GSA, IG, Justice Dept., MAS, multiple award, multiple award contract, OIG, overcharge, settlement, unqualified labor

October 20, 2020 By cs

Nonprofit to pay $1.9 million to settle false claims and kickback allegations on federal contracts for blind workers

Industries for the Blind and Visually Impaired Inc. (IBI) has agreed to pay $1,938,684.09 to resolve allegations that IBI violated the False Claims Act and the Anti-Kickback Act in connection with certain federal contracts set aside to employ blind workers, the Justice Department has announced. 

IBI is a nonprofit corporation headquartered in West Allis, Wisconsin that receives set-aside contracts from federal agencies under the federal government’s Ability One Program.  In exchange, IBI agrees to give jobs to workers who are blind or visually-impaired and comply with other contractual requirements.

The settlement resolves allegations that, between 2009 and 2018, IBI misrepresented to the U.S. Ability One Commission when requesting set-aside contracts for furniture design and installation services that it would maintain a 3:1 blind-to-sighted ratio of employees, and that furniture designers and sales representatives working for IBI took impermissible payments and gifts from manufacturers on certain contracts.  It also resolves claims that IBI improperly subcontracted a set-aside contract for screen-printed clothing to an entity that did not generally use blind labor.

The Ability One Commission operates under the authority of the Javits-Wagner-O’Day Act (JWOD Act), which was passed in 1971 to increase employment and training opportunities for persons who are blind or visually impaired, or who have disabilities so severe that they are otherwise unable to work at competitive employment.  More than 400 companies participate in the AbilityOne Program and receive set-aside federal contracts in exchange for employing approximately 45,000 people who are blind or have severe disabilities.

Among the allegations resolved by the settlement are claims asserted in a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and share in a portion of the government’s recovery.  The lawsuit was filed by Paul Inzeo, formerly a marketing manager at IBI, whose share has not yet been decided.

The settlement also resolves conduct that IBI investigated and disclosed to the United States concerning the receipt of gifts and money by its furniture designers and sales representatives that was not alleged in the whistleblower complaint.  It received credit in the settlement for its disclosure, cooperation, and remediation efforts in connection with this conduct.

The settlement was the result of a coordinated effort among the U.S. Attorney’s Office for the Eastern District of Wisconsin and the Commercial Litigation Branch of the Justice Department’s Civil Division, with assistance from GSA’s Office of Inspector General, the U.S. Army Criminal Investigative Command, the Air Force Office of Special Investigations, the Defense Contract Audit Agency, the AbilityOne Office of the Inspector General, and the U.S. Department of the Interior Office of Inspector General.

The claims resolved by the settlement are allegations only, and there has been no determination of liability.   The lawsuit resolved by the settlement is captioned United States ex rel. Inzeo v. Industries for the Blind, Inc., et al., No. 15-cv-996 (E.D. Wisc.). 

Source: https://www.justice.gov/opa/pr/wisconsin-based-nonprofit-pay-19-million-settle-allegations-false-claims-and-kickbacks

Filed Under: Government Contracting News Tagged With: Ability One, Anti-Kickback Act, DOJ, false claims, False Claims Act, fraud, Justice Dept., JWOD, kickback, set-aside, settlement, whistleblower

July 14, 2020 By cs

Contractor to pay $1 million to settle claims of fraudulently representing airport work by small disadvantaged business

Williams Brothers Construction Inc. (WBCI) has agreed to pay $1 million to resolve allegations that it violated the False Claims Act by misrepresenting its use of a small disadvantaged business to obtain a federally-funded construction contract, the Department of Justice (DOJ) has announced.

“The Disadvantaged Business Enterprise (DBE) Program of the Department of Transportation creates important opportunities for small businesses to participate in construction projects paid for with federal funds,” said Assistant Attorney General Jody Hunt of the Department of Justice’s Civil Division.  “We will hold accountable those who misrepresent their compliance with program requirements to obtain taxpayer funds to which they are not entitled, and thereby undermine the program’s goal of supporting small businesses.”

The settlement resolves claims arising from WBCI’s construction of a new terminal building at the Peoria International Airport using Federal Aviation Administration (FAA) grant funds, and is based on the following factors:

  • The FAA grant required the use of disadvantaged business enterprises for part of the construction.
  • DOJ contends that WBCI knowingly made false representations regarding its plans to use a disadvantaged small firm on the project and then falsified documents to make it appear that an eligible business did window, glazing, and curtain wall work.
  • Instead, WBCI allegedly used that business only as a pass-through and had the work done by an ineligible company.

The settlement was the result of a coordinated effort by the Civil Division, the U.S. Attorney’s Office for the Central District of Illinois, and U.S. DOT’s Office of Inspector General.

Readers are reminded that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/government-contractor-pay-1-million-settle-claims-fraudulently-representing-work-small

Filed Under: Government Contracting News Tagged With: abuse, DBE, DOJ, FAA, false claims, False Claims Act, fraud, IG, Justice Dept., pass-through, pass-through contracts, settlement, small disadvantaged business, USDOT

December 31, 2018 By AMK

Manufacturer agrees to pay $400,000 to settle False Claims Act violations

The United States Attorney’s Office for the Middle District of Pennsylvania has announced that Arvco Container Corporation of Kalamazoo, MI has agreed to pay $400,000 to settle False Claims Act allegations in connection with a contract with the Defense Logistics Agency (DLA) in New Cumberland, PA.

Arvco Container Corporation (Arvco) violated subcontract limitations imposed by federal regulations and the terms of a contract to provide corrugated boxes to the federal government from August 3, 2010 through August 3, 2014.  The contract was awarded by the DLA to Fibre Technologies LLC (Fibre) located in Reading, PA.

The contract was set-aside for eligible HUBZone small businesses in accordance with program requirements administered by the U.S. Small Business Administration (SBA).

Federal regulations and the terms of the contract limited Fibre’s ability to subcontract the manufacturing of the boxes to no more than 50 percent.  Arvco performed 100 percent of the manufacturing requirement.

Arvco’s gross profits for the performance of the contract total $246,682 which will be returned to DLA.  Arvco also agreed to pay a civil penalty amount of $153,318.

Limitations on subcontracting provisions in federal contracts are designed to ensure that otherwise ineligible businesses do not use small or disadvantaged businesses merely as vehicles to access set-aside contracts.

This case was investigated by the U.S. Attorney’s Office for the Middle District of Pennsylvania, the SBA’s Office of Inspector General, and the Defense Criminal Investigative Service.

Readers are reminded that the claims resolved by the settlement are allegations only, and there has been no determination of liability.

Source: https://www.justice.gov/usao-mdpa/pr/michigan-corrugated-manufacturer-agrees-pay-400000-settle-false-claims-act-violations

Filed Under: Government Contracting News Tagged With: DCIS, DLA, DOJ, false claims, False Claims Act, HUBZone, limitations on subcontracting, SBA, settlement, small business

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

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