Wednesday, July 3, 2019

Contractor Pays $4.2 Million to Settle False Claims Allegations

Vance Air Force Base is located in Oklahoma about an hour and a half drive north of Oklahoma City. It is and always has been since it opened in 1941 a base for training Air Force pilots. Base support activities including aircraft maintenance, airfield management, aircrew life support and base operating support is contracted out. From 2009 to 2014, PAE Applied Technologies, LLC (PAE) held the contract on a cost-reimbursable/award fee basis.

The Government has alleged that during the time it held the contract, PAE systematically overcharged the Government for work performed by claiming worker wages in excess of the wage caps specified in the contract. This, according to the Government, amounted to false claims.

The Government got wind of the alleged fraud when a former whistleblower filed a lawsuit under the qui tam, or whistleblower, provisions of the False Claims Act. Qui Tam actions permit private individuals to sue on behalf of the United States for false claims and to share in the recovery. The Act also allows the government to intervene in the lawsuit. In this case, the Government intervened. The hope of most whistleblowers is that the Government will intervene. To pursue the suit privately would be cost prohibitive.

The Government and PAE reached a settlement without having the matter go to trial. Under the terms of the agreement, PAE will pay $4.2 million to settle the civil claims arising from the allegations. In reaching this settlement, PAE did not admit its liability, and the United States did not concede that its claims lack merit. The agreement allows both parties to avoid the delay, expense, inconvenience, and uncertainty of litigating the case.

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