On July 21, 2023, the Department of Justice (“DOJ”) announced that Booz Allen Hamilton Holding Corporation (“Booz Allen” or the “Company”), a Virginia-based provider of data analytics, digital solutions, and consulting services, has agreed to pay $377.45 million to resolve alleged violations of the False Claims Act, 31 U.S.C. §§ 3729–3733 (“FCA”). The settlement, one of the biggest procurement fraud settlements in DOJ history, specifically resolves allegations that Booz Allen improperly billed commercial and international costs to its government contracts from approximately 2011 to 2021.
The FCA allows private citizens (known as whistleblowers or relators) to bring lawsuits on behalf of the government against entities suspected of misusing government funds. Relator Sarah A. Feinberg, a former Booz Allen employee, filed this suit on behalf of the United States in September 2016. In recognition of her contribution to prosecuting the case, Ms. Feinberg will receive a relator’s share of just under $70 million.
Relator claimed that Booz Allen improperly charged indirect costs to government contracts and subcontracts that were actually attributable to its commercial and international contracts, in violation of U.S. government contracting rules requiring that at least one objective of a contract be to benefit the government in order to attribute direct or indirect costs. Booz Allen also allegedly failed to disclose its methods for reconciling indirect costs for commercial and international business operations to the government. Essentially, the lawsuit alleged that Booz Allen profited by subsidizing millions of dollars in commercial costs at the expense of U.S. taxpayers.
Updates will be posted to this blog as the matter progresses. The case caption for the lawsuit is United States ex rel. Feinberg v. Booz Allen Hamilton Inc., case number 16-cv-01911, filed in the U.S. District Court for the District of Columbia. The case currently remains under seal.
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