SAIC vows to fight False Claims lawsuit

Justice Department charges SAIC and four defendants over GSA contract

Science Applications International Corp. said today that it will strongly defend itself against a False Claims Act lawsuit filed against the company by a whistle-blower and federal authorities, characterizing the lawsuit as “without merit.”

“SAIC has cooperated fully with the government inquiry and we have conducted our own independent review of the claims,” Melissa Koskovich, a spokeswoman for SAIC, said in a statement today.

“The government has failed to identify any information provided to SAIC that could have provided SAIC with an unfair competitive advantage in the procurement process. We believe the government’s legal claims are without merit and we intend to vigorously defend against them,” Koskovich said.

On July 2, the Justice Department announced it had joined a False Claims Act whistle-blower suit against SAIC and four other parties alleging that they conspired to defraud the government on a General Services Administration contract to support a naval facility in Mississippi.

The other defendants are Applied Enterprise Solutions; Dale Galloway, chief executive of Applied Enterprise Solutions; Stephen Adamec, former director of the Naval Oceanographic Major Shared Resource Center at the Stennis Space Center in Mississippi; and Robert Knesel, deputy director of the naval shared resources center, according to the DOJ news release.

The lawsuit, filed in U.S. District Court for the Southern District of Mississippi, pertains to a GSA contract in which SAIC was to provide support to a branch of the naval oceanographic center. The contract was awarded to SAIC in April 2004. SAIC subsequently teamed with Applied Enterprise Solutions and Lockheed Martin Space Operations to perform the contract, the Justice Department said.

The suit alleges that the government employees at the naval center shared advance procurement information about the solicitation with SAIC and took other actions to bias the contract selection in favor of SAIC.

The case was filed by whistle-blower David Magee, a former employee at the naval center. Under the False Claims Act, a private party, known as a "Relator," can file an action on behalf of the United States and receive a portion of the amount recovered. The U.S. government may recover three times the amount of its losses, plus penalties.

"Those who do business with the government must act fairly and in accordance with the law," Tony West, assistant attorney general for the civil division, said in the July 2 news release. “As this case illustrates, the Department of Justice will actively pursue legal action against both contractors and federal employees who seek to gain an unfair advantage in the procurement process."

The Justice Department press release describes the GSA contract as worth up to $3.2 billion. However, SAIC today said the aggregate payments to SAIC under the contract task orders totaled approximately $115 million and that $3.2 billion was the ceiling value of the contract.

SAIC also commented further today about its actions in the False Claims lawsuit.

“SAIC provided the government high-quality services under this contract, and there are no claims by the government to the contrary,” Koskovich said. “SAIC is a highly ethical company committed to complying with all applicable laws and regulations. We spend significant time and effort operating a comprehensive and rigorous ethics and compliance program that includes policies, procedures, mandatory training and audit tools. We are proud of our commitment and track record of ethical performance and legal compliance.”

In addition, SAIC responded to allegations in the filing that suggest that SAIC was associated with the destruction of records by a former Navy employee. “SAIC has destroyed no records associated with this case; to the contrary, upon learning of the government’s investigation, we took immediate steps to preserve all potentially relevant records and have made available any and all records requested,” Koskovich said.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Reader Comments

Wed, Jul 8, 2009 M Reston, VA

I read the government's complaint. The case against SAIC is not that clear. (I am not an SAIC employee.) The behavior of the federal employees, however, shows how in control the feds really are. These feds seem to have clearly, persistently and aggressively indulged in really bad behavior. They also did a lot things that are pretty dubious that I see many feds do all the time. It's time to clean up federal contracting. But how about we start with the feds, and DoD in particular! Industry really is not in the drivers seat. Got it Congress? And speaking of Congress, they are only given a vague cameo role in the case, but I think somebody ought to pull on that thread.

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