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Whistleblower Helps DOJ Claim $6.5 Million Settlement Against Navy Contractor

The Department of Justice (DOJ) has announced a $6.5 million settlement to resolve allegations that Vector Planning and Services Inc. (VPSI), a government contractor, made claims for inflated payment sums for contracts with the Navy, a violation of the False Claims Act.

VPSI is a Chantilly, Virginia-based firm that offers systems engineering, information technology, and consulting services. It also operates on the West Coast out of San Diego, California.

DOJ Civil Division Assistant Attorney General Stuart F. Delery said that the agency is determined to combat false claims and ensure that contractors who work with the U.S. military do so “with honest and integrity.”

The company holds contracts with the Navy and several of its contractors to provide management consulting, systems engineering, and information technology services. The terms of the contracts allow VPSI to bill the government for indirect costs, those like overhead that cannot be precisely traced to a specific contract.

According to the complaint, VPSI had been inflating its billings of indirect costs between 2005 and 2009. VPSI allegedly included in those bills direct costs that the government had already paid, thus double billing for these direct costs. Additionally, the government claimed that several other costs were included in the claims that had never been incurred by the company.

U.S. Attorney Laura E. Duffy, of the Southern District of California, said that the settlement shows her office’s “commitment to pursue defense contractors” who fraudulently overcharge the military.

Like many False Claims Act cases, this case was originally brought under the qui tam, or whistleblower, provisions of the Act, which grants private citizens who have knowledge of wrongdoing the right to bring cases on behalf of the government. The whistleblowers are entitled to a share of the total government recovery; in this case, the whistleblower will be awarded $1.28 million.

The case resolved by this settlement, United States ex rel. Hai Ba Trung v. Vector Planning and Services, Inc., was a cooperative effort of several agencies. The Civil and Criminal Divisions of the U.S. Attorney’s Office for the Southern District of California, the DOJ Civil Division, the Defense Criminal Investigation Service, the Defense Contract Audit Agency, and the Naval Criminal Investigative Service were all involved.

No determination of liability was made as a result of the settlement.