Science Applications International Corp. (SAIC) will pay $11.75 million to settle a whistleblower lawsuit that alleged SAIC cheated the government out of millions of dollars under a first responder training program. It was alleged in the whistleblower lawsuit that SAIC was inflating the costs of the government-funded program it has run for 15 years to train firefighters, police and other first responders to deal with emergency situations involving explosives and incendiaries as part of the government’s Weapons of Mass Destruction (WMD) First Responder Program. The whistleblower, Richard Priem, worked for SAIC for almost 16 years. Prior to that he had spent 21 years in the U.S. Army in a variety of command and staff positions. Priem was a SAIC project manager for the WMD First Responder Program and other training programs.
Congress set up the WMD First Responders Program in 1998 in response to the 1995 Oklahoma City bombing. SAIC worked as a subcontractor to New Mexico Institute of Mining and Technology, which has received government funding for the program annually since 1998. SAIC had been awarded the contract by New Mexico Tech on a sole-source basis since 1998. This meant SAIC never had to compete on a price basis for the contract. But it was required to provide accurate information about its costs and profits.
SAIC falsely certified that its costs included payment for full-time employees who received fringe benefits to conduct the training. Instead, SAIC used cheaper, part-time employees who received few benefits. This enabled SAIC to keep its costs low and collect exorbitant profits. Both the federal government and New Mexico Tech each relied on SAIC to provide accurate information about its costs. It was alleged that “SAIC instead inflated its costs so that it could capture roughly one-third of New Mexico Tech’s total appropriation.”
Tim McCormack and Peter W. Chatfield, lawyers with Phillips & Cohen, a Washington, D.C. firm, represented the whistleblower. Department of Justice (DOJ) Senior Trial Counsel Don Williamson and Trial Attorney Daniel Hugo Fruchter, who is with the Commercial Litigation Branch, were involved in the case and they all did a very good job.
Source: Corporate Crime Reporter
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