February 16, 2017

Defense contractor pays $14.9 M to settle FCA suit

By the C|C Whistleblower Lawyer Team

Sierra Nevada Corporation (“SNC”) agreed to settle False Claims Act allegations it misclassified costs—thus inflating its overhead—on several government contracts. The Nevada-based company has several defense and space contracts with the United States. The company’s current flagship project is the design and construction of the “Dream Chaser,” a NASA-funded aircraft designed for space flight.

The allegedly improper charges resulted from SNC’s practice of classifying certain direct contract and manufacturing costs as research and development costs. This misclassification exaggerated the overhead rates paid to SNC across its federal contracts. SNC also allegedly charged certain research and development costs in the wrong accounting period. The misconduct involved the company’s contracts with NASA and the Department of Defense.

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