Booz Allen Whistleblower Case Settled for $377.45 Million

Booz Allen Whistleblower Case: Uncovering Government Overcharging

On July 21, 2023, Booz Allen Hamilton Holding Corporation (Booz Allen) agreed to pay $377.45 million to settle claims that the company billed the government and thus used taxpayer dollars for costs associated with non-government related work. The settlement in this Booz Allen whistleblower case is notably one of the largest fraud settlements. Booz Allen is a company based in McLean Virginia that furnishes international and commercial clients, as well as the government with management, consulting, and engineering services.
In this Booz Allen whistleblower case, the government alleged that it was inappropriately billed  by Booz Allen for international and commercial costs that had no relation to government contracts from 2011 through 2021 and therefore, violated the False Claims Act (“FCA”). Further, Booz Allen was accused of failing to divulge the methods the company used to account for supporting costs of their commercial and international businesses. 

Government contracting rules stipulate that it is necessary for there to be a connection between the costs billed to the government and the purpose of the contract. As a result, a contractor is able to charge the government for costs that are directly or indirectly related to the government contract. However, as illustrated in this Booz Allen whistleblower case, contractors are barred from billing costs that do not have any relationship with a government contract to said contract. 

The aforementioned settlement resolved the qui tam lawsuit entitled United States ex rel. Feinberg v. Booz Allen Hamilton, Inc., Civ. A. No. 16-1911 (D.D.C) and brought forth by the Booz Allen whistleblower, Sarah Feinberg. Feinberg was a financial analyst at Booz Allen after her time as a Marine and decided to blow the whistle on Booz Allen after discovering that the company had consistently been overcharging the government by $100 million per year. As the whistleblower in this case, the former Booz Allen employee will receive $69,828,832 of the total settlement. 

Principal Deputy Assistant Attorney General Brian M. Boynton in discussing this Booz Allen whistleblower settlement, noted that, “Government contractors must turn square corners when billing the government for costs under government contracts. Today’s settlement demonstrates our commitment to hold accountable contractors that knowingly overcharge the government and enrich themselves at the expense of the American taxpayers.” 

Why is it important for this Booz Allen whistleblower case and similar False Claims Act cases to hold companies accountable for overcharging the government?

1. Fiscal Responsibility: Government funds are taxpayer money, and it’s essential to ensure that these funds are used efficiently and responsibly. Overcharging the government means taxpayers are paying more than they should for goods or services, which can result in waste and inefficiency.
2. Fair Competition: When companies overcharge the government, it can create an unfair advantage over competitors who may offer similar goods or services at a lower cost. Holding companies accountable for overcharging helps maintain a level playing field in government contracting and promotes fair competition.
3. Trust and Integrity: Overcharging the government undermines public trust in both the government and the companies involved. It erodes confidence in the integrity of government contracting processes and can lead to skepticism about the effectiveness of government oversight and regulation.
4. Legal and Ethical Obligations: Companies that contract with the government have a legal and ethical obligation to provide goods and services at fair and reasonable prices. Overcharging the government not only violates these obligations but can also result in legal consequences, including fines, penalties, and damage to the company’s reputation.
5. Stewardship of Public Resources: Governments have a responsibility to be good stewards of public resources. Holding companies accountable for overcharging helps ensure that taxpayer dollars are used wisely and efficiently to meet the needs of the public and advance the public interest.