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The
US Attorney’s Office in Philadelphia released the below information:
PHILADELPHIA
– United States Attorney Jacqueline C. Romero announced today that Navmar
Applied Sciences Corporation (NASC), headquartered in Warminster, Pennsylvania,
has agreed to pay $4.4 million to resolve allegations that NASC violated the
False Claims Act by knowingly and improperly double-billing and shifting
certain labor and material costs under a series of contracts with the U.S.
Department of the Navy. Separately, NASC has also agreed to resolve
administrative claims arising out of an audit by the Defense Contract Audit
Agency of NASC’s incurred cost proposals for Fiscal Years 2011, 2012, and 2013.
The United States’ allegations under the False Claims Act arise
from a series of contracts, awarded by the Navy to NASC between 2010 and 2012,
for enhanced intelligence, surveillance, and reconnaissance systems, hardware,
maintenance technical support services, and the development and rapid
deployment of various advanced sensors and Unmanned Aerial Systems.
The United States alleged that under those government contracts,
NASC knowingly and improperly billed the Navy for certain labor and material
costs on one contract, and then billed the same costs on another contract, and
was improperly paid twice. The United States further alleged that in multiple
instances, NASC knowingly and improperly shifted the costs of materials from
one contract to another, to avoid cost ceilings and maximize payments from the
government to which NASC was not entitled.
“This settlement demonstrates the Justice Department’s
commitment to take appropriate action when it determines that taxpayer dollars
have been doubled-billed and improperly accounted for,” said U.S. Attorney
Romero. “Cases such as this one should be seen as a warning to defense
contractors that false claims have no place in military purchasing.”
“Investigating allegations of cost mischarging on Department of
Defense (DoD) contracts is a top priority for the Defense Criminal
Investigative Service (DCIS), the law enforcement arm of the DoD Office of
Inspector General,” stated Special Agent in Charge Patrick J. Hegarty, DCIS
Northeast Field Office. “The DCIS is committed to working with the Naval
Criminal Investigative Service and the Department of Justice to protect the
integrity of the DoD procurement process. The Defense Contract Audit Agency’s
Operations Investigative Support Division provided valuable expertise during
this investigation.”
“Procurement fraud threatens military readiness and therefore
poses a significant threat to our national security,” said Special Agent in
Charge Gregory Gross of the NCIS Economic Crime Field Office. “NCIS remains
committed to ensuring the good stewardship of U.S. taxpayer dollars by
thoroughly investigating all allegations of fraud that damage the integrity of
the Department of the Navy procurement process.”
The resolution obtained in this matter was the result of a
coordinated effort between the United States Attorney’s Office for the Eastern
District of Pennsylvania, the U.S. Department of Justice Civil Division,
Commercial Litigation Branch, Fraud Section, with investigative assistance from
the Defense Criminal Investigative Service, the Naval Criminal Investigative
Service, the Defense Contract Audit Agency, and the Defense Contract Management
Agency.
The matter is being handled in the U.S. Attorney’s Office by Assistant U.S. Attorneys Landon Y. Jones and Mark J. Sherer, and Auditor Dawn Wiggins.
Note: For a good number of years, I did security work for a Defense Department command in Philadelphia that oversaw contractors like Navmar for the U.S. Navy and the other military buying commands.
As I noted in my Counterterrorism magazine piece on the Philadelphia Quartermaster bribery and procurement fraud case, I was involved in several investigations of contractor fraud and other crimes.
You can read about the Quartermaster case via the below link:
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