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INSITU, Inc. to Pay $25 Million to Settle False Claims Act

By DCAA Staff Writer

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DCAA auditor Jim Knauss assisted in the investigation of an alleged violation of the False Claims Act by INSITU, INC. His knowledge of the contracts and his damage calculations significantly contributed to the successful results of the investigation.

On January 12, 2021, Insitu, Inc., headquartered in Bingen, Washington, agreed to pay $25 million to settle allegations it violated the False Claims Act by knowingly submitting materially false cost and pricing data for two contracts with the United States Special Operations Command and five contracts with the Department of the Navy to supply and operate Unmanned Aerial Vehicles (UAVs).  The settlement resolves allegations that Insitu knowingly induced the government to award seven contracts at inflated prices by proposing to supply new parts and materials while planning to, and in fact, using less expensive recycled, refurbished, and/or reconfigured parts.

The settlements were the result of a coordinated effort by the Commercial Litigation Branch (Fraud Section) of the Civil Division of the Department of Justice, the United States Attorney’s Office for the Western District of Washington, the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and the Defense Criminal Investigative Service.

Mr. Knauss reviewed the contracts and modifications, compared negotiated Bill of Materials to accounting records, prepared numerous damage models, and attended meetings including settlement discussions with Insitu and an independent mediator.

Read the Department of Justice press release here.