Pricing Fraud

December 12, 2022

Medical device manufacturer Coloplast will pay $14.5 million to resolve claims that in its contracts with the Department of Veteran’s Affairs the company overcharged the government and submitted false claims.  Coloplast self-disclosed to the government that in violation of the Trade Agreements Act it misreported country of origin and sold products from non-designated countries, and, in violation of applicable Price Reduction Clauses, failed to provide the government with required discounts.  USAO DC

November 29, 2022

Government contractor PowerSecure, Inc. agreed to pay $8.4 million to resolve claims that it failed to completely and accurately report disclose cost or pricing data in connection with securing a sole source contract for the repair and restoration of Puerto Rico’s power grid following the damage caused by Hurricane Maria.  The government asserted that such cost and pricing data was required by the Truth in Negotiations Act, and that PowerSecure’s failure to provide it violated the False Claims Act.  DOJ

July 14, 2021

Diesel Direct, LLC of Stoughton, Massachusetts will pay $850,000 to resolve claims brought in a qui tam action alleging that the company knowingly delivered nonconforming petroleum diesel fuel to state agencies while charging for a higher-priced and more environmentally-friendly biodiesel fuel; improperly charged state agencies a federal fuel excise tax; and failed to comply with the state's Supplier Diversity Program requiring spending with women-owned, minority-owned, and veteran-owned businesses. Mass

May 27, 2021

Navistar Defense LLC, a manufacturer of military vehicles, will pay $50 million to resolve False Claims Act allegations that it fraudulently induced the U.S. Marine Corps to enter into a contract modification at inflated prices for a suspension system for armored vehicles known as Mine-Resistant Ambush Protected (MRAP) vehicles.  During negotiations for the modification, Navistar was asked to provide certain sales information to assess the reasonableness of Navistar’s proposed prices.  The U.S. alleged that Navistar provided the government with fraudulent sales invoices to justify the company’s prices, and that the government relied on these invoices during negotiations.  The investigation was initiated by a qui tam complaint filed by whistleblower Duquoin Burgess, a former Government Contracts Manager for Navistar, who will receive $11,060,000 from the settlement.  DOJ

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

August 31, 2020

CDM Smith Inc. and CDM Federal Programs Corporation paid $5.6 million to resolve charges that they violated the False Claims Act and Truth in Negotiations Act by submitting inaccurate cost and labor hour estimates and related certifications in connection with task orders on a federal contract to supply architect-engineering services to Navy bases.  The case was initiated by an unnamed whistleblower, who will receive a share of the recovery.  USAO ED VA

August 21, 2020

Fire protection services contractor Fiore Industries Inc. will pay $1.2 million to resolve claims that it violated the False Claims Act by overstating its workers’ compensation rates in submitting claims for work it preformed at NASA’s Ames Field Center, thereby overcharging the government.  Fiore’s stated workers compensation rates did not account for discounts it knew it would receive.  USAO ND Cal