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News | Dec. 6, 2021

Government Contractor Agrees to Pay More Than $1 Million to Resolve False Claims Act Lawsuit Alleging Overbilling in U.S. Defense Contracts

By DCAA Staff Writer

DCAA Supervisory Auditor Sandy Porter and former auditors Krystina Durako and Janet Leonard assisted an investigation that resulted in a settlement agreement to pay more than $1 million.

Airbus U.S. Space & Defense, Inc., formerly known as Airbus Defense and Space, Inc. (ADSI)  entered in a settlement agreement to pay to the United States $1,043,475 to resolve allegations that it violated the False Claims Act by billing impermissible fees in contracts involving a number of federal agencies. The settlement was the result of a qui tam or whistleblower action and resolves allegations that, from January 2016 through January 2017, ADSI submitted proposals for contracts that included an unapproved cost rate, referred to as the “Orlando Factor” to which ADSI was not entitled. The government further alleged that on certain contracts, during 2013 through 2020, ADSI charged federal government agencies an additional fee from its affiliates on top of ADSI’s own fee for parts ADSI acquired from its affiliates, but did not accurately disclose this affiliate fee to the government. The government also alleged that ADSI charged a third-party contractor an excessive monthly storage fee to store a radar system purchased to support a contract with the U.S. Navy and passed along the full storage fees charged to the U.S. Navy but did not disclose that it paid only a portion of those storage fees to store the radar system.

The auditors assisted the investigation by briefing contracts and delivery orders for pertinent criteria; reviewing the DCAA office’s permanent files and conveying relevant audit findings to the attorneys; reviewing interrogatory responses, primarily in regards to pricing justifications and any indirect or specific rates.

Read the Department of Justice Press release