Contractor to Pay $1 Million to Settle Allegations of Overcharging U.S. Air Force

by Madison A. Gregg and Faaria Zubair

A federal contractor, Noble Supply & Logistics, LLC (“Noble”), has agreed to pay $1 million to resolve allegations that it overcharged the United States Air Force for services provided at Cannon Air Force Base, in violation of the False Claims Act (“FCA”). Defense contractor fraud is one of the oldest forms of fraud and dates back to the very creation of the FCA, which was established to combat defense contractor fraud in particular. Cases like this emphasize the role whistleblowers play in exposing overbilling and fraudulent schemes that mislead the government.

Allegations at Cannon Air Force Base

The Department of the Air Force, through the 27th Special Operations Contracting Squadron at Cannon Air Force Base, entered into a contract with Noble to provide supplies and materials for maintaining the base’s infrastructure and civil engineering needs. The Government claimed that Noble violated the contract’s pricing and competitive bidding rules, which led to a number of overpayments in violation of the FCA. Noble was specifically accused of submitting fake, altered, or fabricated vendor quotes and withholding lower bids, which caused the Government to overpay for supplies. Even after the Government pointed out the issue, Noble allegedly submitted fake quotes again for the same transactions. The Government also alleged that Noble charged the Air Force extra for shipping, even though those costs were already included in the quoted prices.

Understanding the False Claims Act (FCA) in Defense Contractor Fraud

The FCA establishes civil liability for individuals or entities that defraud the government, like the Air Force, by overcharging or providing false or low-quality goods and services. “Knowingly” submitting illegal claims to the government can lead to serious penalties, including fines of up to three times the amount of the losses, plus an additional penalty tied to inflation for every false claim submitted. A “claim” refers to each time a service or item is billed to the government. What’s important to note is that the law does not require a specific intent to defraud. The term “knowingly” includes not only actual knowledge but also situations where someone acts in deliberate ignorance or with reckless disregard for whether the information is true or false.

In this scenario, the Government alleged that Noble defrauded the Air Force by overcharging for its services, and that its leadership did this knowingly. However, Noble denied these allegations and settled this case for $1 million.

Whistleblowers in the Defense Industry

The FCA grants private citizens, who come to be known as relators or whistleblowers, the ability to bring qui tam lawsuits on behalf of the Government against entities that commit fraud. This is especially important in the defense industry, where fraud often involves large government contracts and improper use of taxpayer dollars. The FCA empowers private citizens to file these suits and potentially obtain a share of the recovery.

Whistleblowers play a huge role in this process since they are often the ones who report fraud or misconduct to the Government. Because of how important they are, the Government offers strong incentives and protections to encourage them to speak up. For example, whistleblowers can receive anywhere from 15 to 30 percent of the recovered funds, and they are also protected from retaliation for coming forward about the wrongdoing they have witnessed.

Miller Shah LLP’s Role in Government Fraud Enforcement

Miller Shah has extensive experience when it comes to handling FCA and whistleblower matters, including defense contractor fraud. Our firm has represented whistleblowers in qui tam actions and has successfully helped them litigate these claims in state and federal courts.

For information about your rights or how we handle defense contractor fraud matters, contact Miller Shah online or call 866-540-5505 to arrange a consultation.