DynCorp resolves false claims suit with $7.7M payment

The United States government has settled a whistle-blower lawsuit against DynCorp International LLC and The Sandi Group, according to an announcement from the Justice Department.

The lawsuit, filed in the U.S. District Court for the District of Columbia, alleged that DynCorp and its subcontractor TSG submitted or caused to be submitted false claims for payment under DynCorp’s contract with the State Department to provide civilian police training in Iraq, according to the DOJ announcement, posted on the department website April 22.

DynCorp has agreed to pay the U.S. $7.7 million to resolve allegations that it submitted inflated claims for the construction of container camps at various locations in Iraq.

TSG agreed to pay $1.01 million to resolve allegations that it sought reimbursement for danger pay that it falsely claimed to have paid its U.S. expatriate employees working in Iraq.

The lawsuit was initially filed by two former TSG employees under the whistle-blower provisions of the federal False Claims Act, which permit private individuals, called relators, to bring lawsuits on behalf of the United States and receive a portion of the proceeds of a settlement or judgment awarded against a defendant, the announcement states.

As a result of the settlement, the two former TSG employees, Drew Halldorson and Brian Evancho, will receive up to $481,710 as their share of the government’s recovery.

“This case demonstrates that the Department of Justice will pursue these cases that undermine the integrity of our public contracting process," Tony West, assistant attorney general for the Civil Division, said in the announcement.

In an e-mail response to a Washington Technology request for comment, DynCorp said: “The company entered into a settlement agreement with the Department of Justice that resolves cost issues related to contractor personnel camps delivered by DI to the State Department in Iraq in 2004-2006. The settlement arises out of the government's investigation of allegations in a qui tam [whistle-blower] complaint filed against DI and a DI subcontractor in 2006. DI cooperated fully with the review of the issues and is pleased to have reached a resolution.

“The settlement primarily addresses the pricing of four camps in 2004," DynCorp added. "The State Department requested that DI propose a fixed price for the four camps, without specifying camp locations or capacity, and DI priced its proposal on an assumption that the State Department would place 300 personnel in the camps. Ultimately, the State Department directed DI to provide capacity for less than 200 personnel at the camps, but the parties did not amend the contract price. The settlement amount reflects a price adjustment based on the reduced capacity of the camps.

“There was no evidence that DI delivered anything less than the quality and size of camps the State Department ultimately sought. The settlement agreement expressly states that DI does not admit any wrongdoing and provides that the qui tam complaint against DI will be dismissed.

“While the company believes that its actions were appropriate and allowable under the contract, we are committed to resolving this issue to the satisfaction of the U.S. government.”

DynCorp International, of Falls Church, Va., ranks No. 23 on Washington Technology’s 2010 Top 100 list of the largest federal government contractors.