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DRS Technical Services, Inc. To Pay a Settlement of $13.7 Million to U.S. Government for Overbilling

On October 9, 2014, the U.S. Department Defense Department (DOD) announced that DRS Technical Services, Inc. (DRS), a longtime contractor for the DOD, agreed to pay the U.S. Government $13.7 million to settle allegations that it violated the False Claims Act (FCA) by knowingly overbilling the Government.  In the lawsuit filed against DRS, the government alleges that DRS violated labor requirements by hiring employees to work on DRS government contracts who did not have the required job qualifications to perform the work agreed upon.  Furthermore, DRS billed the government for a higher category of labor for unsubstantiated work.

For a period of nine years, DRS, a defense technology company located in Arlington, Virginia, provided goods and services to U.S. forces in Iraq, Afghanistan and other places that contain U.S. military.   In 2003, DRS was awarded a contract with the Army’s Communication and Electronics Command (CECOM), and in 2009, the aviation division of DRS was awarded a contract to perform aircraft maintenance for the Coast Guard.  The lawsuit filed by the Government claims that between January 1, 2003 and December 2012, DRS billed CECOM for services rendered by contractors that failed to provide qualified labor as promised in the contract, and thereby violated the FCA.

Government contracts are awarded to an individual or company expected to adhere to the rules and regulations outlined in the agreement.  However, this is not always the case.  For example, M.K. Battery, Inc. (M.K. Battery), East Penn Manufacturing Company (East Penn), NPC Robotics, Inc. (NPC), BAE Systems, Inc. (BAE) and BAE Systems Tactical Vehicle Systems LP (BAE), were also charged for allegedly violating the False Claims Act (FCA) by selling the U.S. Military substandard batteries for Humvee gun turrets used on military combat vehicles in Iraq.  Consequently, on September 16, 2014, they agreed to pay the Government a settlement of $5.5 million.

When DRS and other government contractors allegedly violate labor or equipment agreements outlined in the Government contracts, they compromise the standards and reliability of equipment and products that U.S. Troops have come to rely and depend on in order to effectively perform their jobs.  The FCA, originally enacted by Congress in 1863 and amended many times since then, is designed to hold those that violate Government contract accountable and states that any company or individual who knowingly submits false claims to the government is liable for treble damages plus penalties for each false claim.

© 2020 by Tycko & Zavareei LLPNational Law Review, Volume IV, Number 292
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About this Author

Jonathan K. Tycko leads the Whistleblower Practice Group of Tycko & Zavareei LLP

In recent years, the laws of the United States have undergone a whistleblower revolution. Federal and state governments now offer substantial monetary awards to individuals who come forward with information about fraud on government programs, tax fraud, securities fraud, and fraud involving the banking industry. Whistleblowers also now have important legal protections, designed to prevent retaliation and blacklisting.

The law firm of Tycko & Zavareei LLP works on the cutting edge of this whistleblower revolution, taking on even the most complex and confidential whistleblower...

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