Defense Contractor Fraud

A settlement has been reached in a whistleblower class action lawsuit brought against Contrack International Inc who is accused of submitting false claims in connection with U. S. Agency for International Development (USAID) contracts.

The settlement reached was to resolve allegatiosn by Contrack only. The government is continuing to pursue its claims against the other two defendants in the suit.

The originally suit was filed in 2004.  The government's allegations against Contrack were in relation to The settlement concerns USAID-funded contracts for the construction of water and wastewater infrastructure projects in the Arab Republic of Egypt in the 1990s.  The bidders for these contracts were required to receive prequalification and, in some cases, establish that they were U. S. companies.  However, the contracts were ultimately performed by a joint venture partnership among Contrack; Washington Group International, Inc., a subsidiary of URS Corporation; and Misr Sons Development S.A.E. (Hassan Allam Sons), an Egyptian company.  The government filed suit under the False Claims Act and the Foreign Assistance Act alleging that the joint venture partners evaded the prequalification requirement by concealing the identity of the joint venture partners, which prevented USAID from accurately evaluating their qualifications.  As a result, the government alleged that Contrack and its partners received USAID-funded contracts for which they were ineligible.

A settlement has been reached in a whistleblower class action lawsuit brought against Conax Florida Corp who is accused of submitting false claims to the government for improperly tested inertia reels and non-conforming voltage references.

Under the settlement agreement, Conax will pay $2 million to the government.  In addition, Conax has reached an agreement with the Defense Logistics Agency to provide the government with 4,969 new electronic parts for use with parachute releases, which are worth up to $2.4 million.   The whistleblowers that filed the suit together will receive up to a total of $810,478.

The case was originally filed in December 2008.  The government's lawsuit alleged that the inertia reels were not tested in accordance with contractual requirements and that Conax used non-conforming voltage references.  The voltage reference is an integral part of the water-activated parachute release, designed to protect unconscious or injured aircrew members who parachute into salt water.  These devices are intended to automatically separate parachutes from aircrew members when they are physically unable to do so.  If parachutes are not released, they may fill with water and drag aircrew members underwater.

A settlement has been reached in a whistleblower class action lawsuit brought against FreshPoint Inc who is accused of overcharging the Department of Defense for fresh fruit and vegetables purchased under 15 separate contracts.  The contracts were awarded to East Coast Fruit Company and subsequently performed by FreshPoint following FreshPoint’s acquisition of East Coast Fruit Company in 2007. 

The whistleblower in this case will receive $798,000 of the government's recovery.

The intial lawsuit was filed in December of 2010.  The government complaint claims that from Dec. 17, 2007, through Sept. 11, 2009, FreshPoint overcharged the government on hundreds of sales of fresh fruit and vegetables by improperly inflating its prices to the government to reflect FreshPoint’s view of the prevailing market price of the goods at the time of sale.  The government alleged that this practice violated FreshPoint’s contracts with the government that required FreshPoint to provide the produce at cost, plus a pre-established mark-up for profit, and did not allow FreshPoint to make additional price adjustments based upon perceived changes in market prices.

A settlement has been reached in a whistleblower class action lawsuit brought against Northrop Grumman Corp who is accused of charging its federal contracts certain costs for deferred compensation awards to key employees, even though it had promised not to do so as part of the earlier 2002 settlement.

Northrop had agreed in its 2002 settlement with DCMA that it would limit the amount of deferred compensation it would include in proposals for subsequent contracts.  The government’s contracting officer found that Northrop had failed to honor this commitment and should be assessed a penalty equal to twice the amount of the unallowable costs claimed.  Northrop challenged the decision in a complaint filed in the U.S. Court of Federal Claims in Washington, D.C.  The Department of Justice responded to the suit with counterclaims alleging that in addition to the FAR penalties, Northrop also had violated the False Claims Act by passing along these unallowable costs to the government in indirect rates applicable to hundreds of 2004 contracts with the government.  The government alleged that as a consequence of Northrop’s knowing misrepresentations, it was induced to pay more than $1.9 million in unallowable costs in thousands of vouchers and invoices.

A settlement has been reached in a whistleblower class action lawsuit brought against Sanborn Map Company Inc who is accused of submitting false claims in connection with U. S. Army Corps of Engineers contracts.

The whistleblower's share of the government's recovery has not been determined.

Filed in May of 2011, the complaint charges Sanborn Map Company Inc with using unapproved foreign subcontractors on three projects, which violated contractual obligations and caused delays on these projects.  Additionally the government alleged that Sanborn used unapproved domestic subcontractors when Sanborn was required to complete all map work in-house and charged unrelated work to the government contracts.

A settlement has been reached in a whistleblower class action lawsuit brought against MPRI Inc. who is accused of submitting false labor charges on a contract to support the Army in Afghanistan.

The whistleblower will receive $576,000. 

The whistleblower lawsuit was filed in March 2010.  The government alleged that MPRI Inc billed for employees who had not worked because they had been granted leave and were out of the country.  The alleged false billing occurred between March 2005 and October 2010. 

A settlement has been reached in a whistleblower class action lawsuit brought against Vector Planning and Services Inc who is accused of inflating claims for payment under several Navy contracts.

 The whistleblower in this case will receive $1.28 million.

The case was filed in 2012 and the complaint alleges that, from 2005 to 2009, VPSI inflated its indirect cost billings to the government by improperly including direct costs, for which it had already been paid, in indirect cost accounts that were then allocated across its government contracts and billed again. The government further alleged that VPSI submitted claims for other costs that were never incurred.

A settlement has been reached resolving False Claim Act Allegations by DRS Technical Services Inc who is accused of overbilling the government for work performed by DRS personnel who lacked the job qualifications required by the contract.

The alleged labor mischarging occurred on the Rapid Response or “R2” contract issued by the U.S. Army Communication and Electronics Command (CECOM) located at the Aberdeen Proving Ground in Maryland.  The U.S. Army used the R2 contract to purchase a variety of goods and services needed to support U.S. forces in Iraq, Afghanistan and elsewhere on a quick turnaround basis.

The government contends that from Jan. 1, 2003, to Dec. 31, 2012, DRS billed CECOM for work performed by individuals whose job qualifications did not meet all the qualifications prescribed by the contracts for the labor categories under which their efforts were billed, thereby falsely increasing the amount of money DRS claimed and CECOM paid.  Similarly, from Dec. 19, 2009, to Dec. 18, 2011, the government contends that DRS charged the Coast Guard’s Aviation Logistics Center for work performed by individuals whose job qualifications did not meet the qualifications prescribed by the contract, again, thereby inflating the cost of the services provided.   

A settlement has been reached in a whistleblower class action lawsuit brought against The Boeing Company who is accused of submitting false claims for labor charges on maintenance contracts with the U.S. Air Force for the C-17 Globemaster aircraft.

The whistleblowers that initiated this case will receive $3,910,000 as their share of the settlement.

Originally filed in 2007, this whistleblower lawsuit made claims 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 Aerospace Support Center in San Antonio, Texas.  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 and improperly billed a variety of labor costs in violation of applicable contract requirements, including for time its mechanics spent at meetings not directly related to the contracts.

A settlement has been reached resolving False Claims Act Allegations by First RF Corporation who is accused of submitting inflated  claims for electronic warfare antennas sold to the U.S. Army to combat Improvised Explosive Devices.

The government's investigation into First RF’s conduct is in connection with a 2005 Army contract for the sale of electronic warfare antennas.  Specifically, the United States alleged that First RF knowingly submitted false data to the Army that misrepresented First RF’s cost to manufacture the antennas, and thereby inflated the price for the antennas and the payments First RF received for them.