Booz Allen Hamilton to Pay $15.8 Million for Leaking Confidential Bid Information
Prominent U.S. Defense Contractor Booz Allen Hamilton has agreed to pay $15.875 million over claims by the federal government that it violated the False Claims Act. Photo credit: Google Street View.
Prosecutors say Booz Allen violated the False Act Claims by submitting fraudulent claims to the General Services Administration about military training simulators and systems to supply the Department of Defense’s agencies, including the Air Force, according to a Justice Department press release.
This company, with headquarters in McLean, Virginia, is used by the government of the U.S. as a provider of management, consulting and engineering services.
Program Managers Allegedly Collaborated to Undermine Fair Bidding Process
Former program managers John G. Hancock and Karen K. Paulsen, along with a civilian Air Force employee Keith A. Seguin and co-owner of Booz Allen subcontractor QuantaDyn, David J. Bolduc Jr. knowingly leaked confidential information that led to led to the GSA awarding contractor Booz Allen Hamilton a task order for training simulators, which the contractor then transferred to QuantaDyn, according to the settlement in the case.
Why Are Bids for Government Contracts Confidential?
This case brings up an important question – why are bids on government projects confidential? For several reasons.
First, the government wants to protect fair competition, as it ensures that all bidders have the same starting positions.
Second, it’s a way to protect confidential information and prevent potential misuse or competitive disadvantage. National security concerns are also a reason since certain defense contracts and bids might contain classified information that can only be divulged on a need-to-know basis. Finally, keeping bids confidential prevents potential market manipulation.
Other Booz Allen Hamilton Legal Woes
This case wasn’t the only legal problem Booz Allen has dealt with in recent years.
In 2023, it agreed to pay $377.45 million after a whistleblower discovered violations of the False Claims Act between 2011 and 2021. In this case, it got in trouble for allocating indirect costs associated with commercial and international business to contracts and subcontracts that either had no relationships with or were in disproportionate amounts, say federal watchdogs.
The whole case came to light thanks to Sarah Feinberg, a former Marine Corps officer, who started working at this company after leaving the service. Feinberg received $40 million in another settlement for discovering the alleged fraud and filing a complaint.
But Feinberg didn’t report the fraud for the money. In a statement to NBC, the mother of three said it was about doing the right thing.
“I’ve got three kids, and I tell them, ‘Doing the right thing is the right thing, no matter what the outcome is.’ There’s very few times in this life where you’ll actually be rewarded for doing the right thing, but this is one of those unique situations.”
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