Whistleblower Protection Act | The Contracting Education Academy

March 13, 2017 By AMK

IT firm agrees to pay $45 million to settle alleged false claims on GSA contract

CA, Inc. (CA) has agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract.

CA is an information technology management software and services company headquartered in New York, New York. The settlement resolves allegations related to a GSA contract awarded to CA for software licenses and maintenance services.

Under Multiple Award Schedule (MAS) contracts like this one, GSA pre-negotiates prices and contract terms for subsequent orders by federal agencies.
At the time of CA’s contract, contractors were required to fully and accurately disclose to GSA how they conducted business in the commercial marketplace so that GSA could use that information to negotiate a fair price for government agencies using the GSA contract to purchase CA products and services.
The contract also contained a price reduction clause that set forth when the contractor had to reduce the prices it charged to the government if its prices to commercial customers improved.

The settlement between CA and the federal government resolves allegations that CA did not fully and accurately disclose its discounting practices to GSA contracting officers. Specifically, the agreement resolves claims that CA provided false information about the discounts it gave commercial customers for its software licenses and maintenance services at the time the contract was negotiated in 2002 and was extended in 2007 and 2009. Additionally, the settlement resolves claims that CA violated the price reduction clause in the contract by not providing government customers with additional discounts when commercial discounts improved.

The allegations against CA were first made in a whistleblower lawsuit filed under the False Claims Act by Dani Shemesh, a former employee of CA Software Israel LTD. Under the False Claims Act, private individuals can sue on behalf of the government and share in any recovery. The False Claims Act also allows the government to intervene and take over the action, as it did, in part, in this case. Shemesh’s share of the settlement is $10.195 million.

This case was handled by the Civil Division’s Commercial Litigation Branch, the U.S. Attorney’s Office for the District of Columbia, and the GSA Office of Inspector General.

The Department of Justice (DOJ) announced this settlement on Friday (Mar. 10, 2017). The lawsuit is captioned United States ex rel. Shemesh v. CA, Inc., No. 09-1600 (D.D.C.). The claims resolved by the settlement are allegations only; there has been no determination of liability.

Source: https://www.justice.gov/opa/pr/ca-inc-pay-45-million-alleged-false-claims-government-wide-information-technology-contract

October 27, 2016 By AMK

Whistleblower alleges culture of intimidation at DCAA

J. Kirk McGill was a Senior Auditor at the Defense Contract Audit Agency (DCAA), the agency responsible for auditing the Department of Defense’s (DoD) contract expenditures. He is also a whistleblower whose disclosures to Congress have resulted in multiple Congressional hearings, the termination of a nonprofit from grants worth over $400 million, and the closure of a loophole in contracting policy for nonprofit grantees.

Importantly, his case also sets a precedent for federal whistleblowers to engage in whistleblowing activities while on official time. None of this was easy, and it came—as is too often the case for whistleblowers—at a personal cost to McGill.

In 2013, McGill and his DCAA team were loaned out to the National Science Foundation’s (NSF) Inspector General (IG) to conduct a follow-up audit of the $433 million construction grant NSF had awarded for a project called the National Ecological Observatory Network (NEON). The project was not competitively bid, and despite an earlier DCAA audit finding serious problems with the initial proposal, NSF awarded it to a nonprofit organization called NEON, Inc.—a nonprofit focused solely on the project.

McGill, who was the Auditor-in-Charge, and his team found that NEON, Inc.’s accounting system was seriously flawed and lacked important supporting documentation. The audit also found poor budget controls that meant the project managers wouldn’t know if the program ran over budget—even tens of millions of dollars over budget—until it was too late to prevent. (The NSF later admitted that the project had run $80 million over budget.) As concerning as those numbers are, the audit also found that NEON, Inc. was abusing a $1.8 million category of funds called “management fees,” which were being used to pay for unallowable costs like alcohol, lobbying, and a lavish holiday party. McGill reported two instances of suspected fraud to the NSF IG through the normal channels. The IG investigated and referred the cases to the Department of Justice (DOJ) for potential prosecution, but DOJ declined to pursue them [p.3].

When McGill examined the requirements of reporting suspected fraud in an audit report, he found himself trapped.

Keep reading this article at: http://www.pogo.org/blog/2016/10/whistleblower-alleges-culture-of-intimidation-at-dcaa.html

June 29, 2016 By AMK

State Department employee not protected when he refused to violate a contracting regulation

The State Department acted properly when it punished an employee for refusing to carry out a rule-breaking assignment, a federal court has decided, setting a new precedent in the federal workforce.

The U.S. Court of Appeals upheld a ruling originally determined by the Merit Systems Protection Board in Rainey v. State, in which an employee argued the department improperly gave him a poor performance review and took away responsibilities when he refused to carry out a directive that went against federal rules. Instead, the court affirmed in a precedent-setting opinion, State was permitted to take those actions because rules and regulations do not qualify as federal statute.

The Whistleblower Protection Act protects a federal employee from retaliation “for refusing to obey an order that would require the individual to violate a law.” Timothy Rainey was instructed by a supervisor to compel a contractor to rehire a fired subcontractor, according to court documents. Such a request violates a provision of the Federal Acquisition Regulation (FAR), and Rainey refused to carry out the order.

Keep reading this article at: http://www.govexec.com/oversight/2016/06/federal-court-agencies-can-punish-employees-refusing-break-rules/129000

CA, Inc. (CA) has agreed to pay $45 million to resolve allegations under the False Claims Act that it made false statements and claims in the negotiation and administration of a General Services Administration (GSA) contract.

The State Department acted properly when it punished an employee for refusing to carry out a rule-breaking assignment, a federal court has decided, setting a new precedent in the federal workforce.

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