The Justice Department last Friday said Booz Allen Hamilton [BAH] has agreed to pay the U.S. government $377.5 million to resolve allegations that it violated federal law by improperly charging commercial and international costs to its government contracts.
The government alleges that over a 10-year period beginning in 2011, Booz Allen billed government contracts and subcontracts that should have been invoiced to separate commercial and international contracts. It also says that the firm did not disclose to the government how it accounted costs related to the commercial and international businesses.
“As a result, Booz Allen obtained reimbursement from the government for the costs of commercial activities that provided no benefit to the United States,” the Justice Department said.
The government said the agreement with Booz Allen’s is one of the largest procurement fraud settlements in history.” It also said the settlement resolved a lawsuit filed under the whistleblower provision of the False Claims Act and was filed by Sarah Feinberg, a former employee of the company. She will receive $69.8 million as part of the settlement.
Jefferies aerospace and defense analyst Sheila Kahyaoglu said in a client note on Monday that Booz Allen previously recorded a $350 million charge to account for the settlement with the government. She also published a chart based on Justice Department data showing the average settlement or judgment the past few years related to the False Claims Act was about $18 million.