DynCorp Whistleblower: Key False Claims Act Settlements and Protections

Background: DynCorp and the CIVPOL Contract

DynCorp International LLC has agreed to pay $21 million to settle False Claims Act allegations of submitting inflated subcontractor charges under the State Department’s CIVPOL contract, which tasked the private military contracting company with training Iraqi police forces. DynCorp was originally headquartered in Irving, Texas, and Falls Church, Virginia before being purchased by Amentum, another government contractor with headquarters in Chantilly, Virginia, in November 2020. The CIVPOL contract was originally awarded to DynCorp in April 2004 by the State Department’s Bureau for International Narcotics and Law Enforcement Affairs to provide support and training for civilian police in Iraq in the form of trainers, guards, translators, vehicles and living quarters for contractor personnel.

The settlement was announced in early April by U.S. Attorney Edward R. Martin, Jr., Principal Deputy Assistant Attorney General Yaakov Roth of the Department of Justice’s Civil Division, and Assistant Inspector General Robert J. Smolich for Investigations at the Department of State Office of Inspector General.

Allegations and Lawsuit Details

In 2016, the United States filed a lawsuit against DynCorp claiming that one of its main CIVPOL subcontractors charged excessive, uncompetitive, and unsubstantiated rates for hotel lodging and guard, translator, driver, and supervisor services, whose charges were then passed on to the State Department for reimbursement with DynCorp’s knowledge in direct opposition to the company’s obligations as a government prime contractor. The United States also alleged in its complaint that DynCorp added its own superfluous markup to this subcontractor’s already extravagant charges, further increasing the expenses it submitted for government reimbursement.

Several United States authorities who made the settlement announcement have spoken up regarding these allegations and subsequent payments. The Civil Division’s Principal Deputy Assistant Attorney General, Yaakov Roth, asserted the responsibility of government contractors in a statement, saying that “Federal contractors have a duty be fair and honest when doing business with the government… The Department will not tolerate those who use times of conflict and strife to enrich themselves at the expense of the American people.”  His thoughts coincide with those of Assistant Inspector General Robert J. Smolich, who further emphasized the importance of accountability, government service, and American security: “Today’s settlement sends a clear message that those who seek to exploit State Department contracts in order to defraud American taxpayers will be held accountable for their actions.”

Settlement and Government Response

The settlement, which was announced April 9, thus represents a conclusion to a longstanding legal dispute over a breach of government contract and False Claims Act violations. It is part of a broader effort on the part of the Department of Justice and the State Department to better identify and eliminate excessive spending, ensure accountability and security in the realm of government contracting, and ensure efficient use of taxpayer money. The resolution obtained in this matter was the result of an effort by the Civil Division’s Commercial Litigation Branch, Fraud Section, the U.S. Attorney’s Office for the District of Columbia, and the U.S. Department of State’s Office of Inspector General.

What rights and protections do federal employee whistleblowers have?

Whistleblowers for federal contract violations like in the case of Dyncorp are protected from employer retaliation like firing, laying off, demoting, denying promotion for reporting fraud and false claims by the False Claims Act, which also allows whistleblowers to receive 15-30% of the recovered amount if they are successful. The False Claims Act also applies to cases outside the United States in which federal spending, procurement, or contracting are involved. This means that even whistleblowers outside of the United States working under federal contractors like Dyncorp can report and expose fraud for overseas government contracts and maintain protections provided by the False Claims Act. Furthermore, the U.S. Department of State’s Office of the Inspector General encourages whistleblowers to report potential wrongdoing, as they “perform an essential service to the Department of State, U.S. Agency for Global Media (USAGM), and U.S. Section of the International Boundary and Water Commission (USIBWC) in keeping government operations honest, efficient, and accountable.” Federal employees may report wrongdoing to the U.S. State Department Office of Inspector General (State OIG), U.S. Office of Special Counsel (OSC), Congressional Committee, or another employee designated by the Department, USAGM, USIBWC to receive such disclosures.

How can a federal employee identify a potential wrongdoing?

The U.S. Department of State’s Office of the Inspector General lists the following potential violations.

• Gross mismanagement: substantial risk of significant adverse impact on mission
• Gross waste of funds: more than a debatable expenditure
• Abuse of authority: an arbitrary decision for personal gain and/or to injure others, or
• A substantial and specific danger to public health or safety
• A violation of any law, rule, or regulation