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Contract Non-Compliance

This archive displays posts tagged as relevant to fraud arising from or resulting in non-compliance with government contracts. You may also be interested in the following pages:

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February 26, 2021

United Airlines will pay a total of $49 million to resolve criminal and civil claims that its cargo division fraudulently overcharged the U.S. Postal Service under International Commercial Air (ICAIR) contracts by which United transported U.S. mail internationally.  While the contracts required United to bill the government based on the delivery of mail receptacles, as supported by departure and arrival scans of the receptacles, United submitted false data that was not based on actual scans or the movement of mail, and United employees who knew about the false data and billings took steps to conceal this information.  To resolve the criminal claims, United will pay $17.3 million in penalties and enter into a non-prosecution agreement including specific compliance and reporting requirements; to resolve civil claims under the False Claims Act, United will pay $32.2 million.  DOJ

Catches of the Week: Contractors Abroad Face Liability for Fraud in U.S. Government Contracts

Posted  02/19/21
fleet of navy ships
This week, we double up on the Catch of the Week, and highlight two actions involving foreign contractors doing business with the U.S. Navy.

French Concrete Contractor Pays $14.5 Million to Resolve Claims of Delivering Substandard Concrete for U.S. Navy Bases in Africa

In the first case, Colas Djibouti, a subsidiary of French contractor Colas, agreed to pay $12.5m to the U.S. government to settle criminal charges,...

February 17, 2021

French contractor COLAS Djibouti SARL will pay a total of $14.5 million to resolve claims that it supplied substandard concrete under a contract with the U.S. Navy for construction of Navy airfields in the Republic of Djibouti.  Colas Djibouti was required to certify that concrete supplied met contractual specifications for composition and characteristics, but made fraudulent misrepresentations and created fictitious testing results regarding the concrete’s composition and characteristics.  Defendant entered into a deferred prosecution agreement on criminal claims, paying $12.5 million ($10 million in forfeiture and restitution, and $2.5 million as a criminal penalty).  Defendant also entered into a civil settlement for  $3.9 million, receiving a credit of $1.96 million for its payment under the DPA.  DOJ; USAO SD Cal

December 3, 2020

Workrite Ergonomics LLC and its parent company, Knape & Vogt Manufacturing Co., have agreed to pay $7.1 million to resolve a qui tam suit brought by a former sales manager, Michael Franchek, which alleged that Workrite overcharged the federal government for office furniture purchased under General Services Administration (GSA) contracts.  Workrite allegedly failed to provide GSA, and state agencies that relied on GSA's pricing, with accurate information during contract negotiations, and failed to extend lower prices to government customers as required by contract provisions.  As part of the settlement, Franchek will receive a relator’s share of $1.27 million.  DOJ; USAO NDCA; CA

November 20, 2020

Information technology contractor Cognosante, LLC will pay $19 million to resolve allegations that it violated the False Claims Act by overcharging the government under two GSA Multiple Award Schedule contracts.  The settlement came after Cognosante disclosed to the U.S. that it provided false information concerning its commercial discounting practices during contract negotiations and, during contract performance, charged the government for labor that failed to meet the qualifications set forth in the contracts.  DOJ; USAO DC

Wireless Carriers – Government Contracting Fraud ($138.7 million)

Constantine Cannon represented whistleblower OnTheGo Wireless, LLC, in state False Claims Act litigation against the four largest U.S. wireless carriers, AT&T Mobility, Verizon Wireless, Sprint, and T-Mobile, that resulted in the recovery of $138.7 million for the states of California, Nevada, and other jurisdictions, including political subdivisions in those states.  The whistleblower, an industry expert but not an insider at any of the carriers, alleged that the carriers knowingly failed to comply with contractual promises to deliver service “at the lowest cost available,” and provide rate plan “optimization” reports each quarter.  The contracts in questions were cooperative purchasing contracts that allowed different government entities to purchase under the terms and conditions of a master contract negotiated by a lead government agency.  For the carriers, becoming providers under the cooperative purchasing agreements gave them access to a multi-billion dollar market and, eager to have that access, the carriers agreed to provide rate plan optimization, but then, according to the whistleblower, failed to provide it.  The contracts were long-standing and the terms highly specialized.  And, many government agencies agreed to purchase under the contracts based solely on the fact they were put together by the Western States Contracting Alliance (“WSCA”).  This created an opportunity, OnTheGo alleged, that the carriers knowingly exploited to breach their promise to deliver low cost service and rate plan optimization, resulting in hundreds of millions of overcharges to government entities.  Over 30 California political subdivisions intervened in the California action and were also represented by Constantine Cannon; the State of Nevada intervened in the Nevada action. Plaintiffs ultimately recovered $138.7 million, and the whistleblower received a relator share of nearly 40%.  See Press Release and Whistleblower Insider for more.

Wireless Carriers Pay $138.7 Million to Settle Claims of Overcharging Hundreds of State and Local Entities Under Cooperative Purchasing Contracts

Posted  09/24/20
cell tower
Constantine Cannon represented whistleblower OnTheGo Wireless, LLC, as well as 30 California political subdivisions in litigation that resulted in recoveries under the state False Claims Acts of California and Nevada from the nation’s four largest wireless carriers: Verizon Wireless, AT&T Mobility, Sprint, and T-Mobile.  With California court approval of the AT&T and Verizon settlements on September 24, 2020,...

September 22, 2020

Contractors Bechtel National Inc., Bechtel Corporation, AECOM Energy & Construction, Inc., and Waste Treatment Completion Company, LLC will pay $57.75 million to resolve claims that they violated the False Claims Act by overbilling the Department of Energy for work on the Hanford Waste Treatment Plant.  The investigation was initiated by four whistleblowers who reported overcharging by defendants on craft labor performed by electricians, millwrights, pipefitters, and other skilled trades workers, including billing for unallowable and unreasonable idle time caused by management failures in scheduling work.  The whistleblowers will receive $13.75 million from the settlement.  USAO ED WA

September 17, 2020

LexisNexis Coplogic Solutions Inc. agreed to pay $10 million to Florida, which intervened in an action brought by whistleblower Christopher Hood under the Florida False Claims Act alleging that the company was underpaying the state.  LexisNexis contracted with the state to provide motor vehicle crash reports to the public for a small fee; a portion of the fee collected by LexisNexis, $10 per report, was to be paid by the company to the state Department of Highway Safety and Motor Vehicles.  However, the whistleblower and state alleged that LexisNexis systematically understated the number of reports it sold, thereby underpaying the state.  The relator, a former employee of LexisNexis, will receive a whistleblower award of $1.8 millionFlaEarlier settlements
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