DCAA Announces Defense Contractor To Pay $25M To Settle False Claims Act (Filing Known Overcharges)
Taxation NewsFebruary 9, 2021
The DCAA recently published a summary of the Department of Justice (DOJ) prosecution of DoD contractor Insitu, Inc., which provides Unmanned Aerial Vehicles (UAVs) to Special Forces and the US Navy. The contractor was caught intentionally defrauding the government with false cost and pricing data on seven federal contracts.
As the article states, “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 DCAA audit team was instrumental in this DOJ case, and discovered the contractor discrepancies with help from a whistle-blower in the company.
In sharing this story with the Kline Team, founder and president, Fred Kline focused on an important insight. “Federal contractors must follow the FAR in all respects. This includes accuracy in cost and pricing models, and in serving the warfighter with integrity of workmanship and materials. As an accounting firm specializing in DCAA Compliance, we help federal contractors in all aspects of accounting for awarded funds. We do not knowingly work with unethical contractors, and we certainly do not support or participate in such schemes as in this case. Defrauding the taxpayer, the government, and the customer are bad enough! Placing the warfighters and their mission in jeopardy by using unapproved remanufactured parts is unconscionable. ”
You can read the DCAA article at https://www.dcaa.mil/Agency-News/Article-View/Article/2482670/insitu-inc-to-pay-25-million-to-settle-false-claims-act/
You can read the DOJ press release here:
And, it’s always wise to google “DCAA FAR false claims act” once in a while. It makes for interesting reading.