Booz Allen False Claims Act Allegations
Booz Allen Hamilton Holding Corporation, a management and consulting services provider, has settled for $377.45 million with the US government. This follows accusations of False Claims Act violations by wrongly billing commercial and international costs to government contracts. Booz Allen, based in McLean, Virginia, serves the US government as well as commercial and international clients.
The settlement reached pertains to allegations stemming from 2011 to 2021 where Booz Allen allegedly charged unrelated costs to both government contracts and subcontracts alike. Specifically, the government claimed that Booz Allen wrongly allocated indirect costs associated with its commercial and international business to government contracts. Moreover, Booz Allen allegedly didn’t disclose its cost accounting methods, resulting in the reimbursement of commercial activities that didn’t benefit the United States.
Principal Deputy Assistant Attorney General Brian M. Boynton of the Justice Department’s Civil Division said, “Government contractors must turn square corners when billing the government for costs under government contracts.” He further emphasized, “Today’s settlement showcases our dedication to holding contractors accountable for knowingly overcharging the government and profiting at American taxpayers’ expense.”
U.S. Attorney Matthew M. Graves for the District of Columbia praised the settlement, calling it “one of the largest procurement fraud settlements in history.” He added, “The Justice Department is committed to identifying all fraud, waste, and abuse in government programs, regardless of size or complexity.”
Terri Dilly, Director of the Defense Contract Audit Agency (DCAA), expressed appreciation for the opportunity to support the Justice Department and law enforcement partners in enforcing the False Claims Act. She emphasized the importance of interagency cooperation in ensuring the appropriate use of taxpayer dollars.
The settlement resolves a qui tam lawsuit, a whistleblower provision of the False Claims Act that allows individuals to sue on behalf of the United States for false claims and receive a portion of the amount recovered by the US government. The lawsuit was filed by Sarah Feinberg, a former Booz Allen employee, who is set to receive nearly $70,000,000 from the settlement.
What is the impact of the settlement on Booz Allen‘s finances?
Booz Allen‘s settlement of $377.45 million will have a significant impact on the company’s finances. The settlement amount represents a substantial portion of the company’s revenue, which was $7.9 billion in 2020.
As a result, the settlement will likely affect the company’s profitability and financial performance in the short term.