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July 12, 2013 Military Contractor Fraud

Defense Contractor Defrauds Military and Taxpayers of Millions

Thanks to a qui tam whistleblower, another defense contractor has agreed to a settlement in order to resolve allegations that it violated the federal False Claims Act. According to the government’s suit, Science Applications International Corporation (SAIC) was submitting false and fraudulent claims while under contract with the General Services Administration (GSA). As a result of the settlement, SAIC will pay $5.75 million.

Defense Contractor Fraud

In 2006, the General Services Administration (GSA) decided to award SAIC with what is known as a “blanket purchase agreement” (BPA). Under this contract, SAIC was to provide professional engineering and consulting services to multiple branches of the United States military. A BPA is a pre-arranged purchase agreement that is made between one government agency and one business or company. BPAs are mainly used by federal agencies in order to satisfy the need for constant products or services. In the BPA with SAIC, the services required under the contract were for the study and evaluation of new products and different types of cutting-edge technologies.

According to the allegations, SAIC personnel were able to essentially trick the GSA into awarding them with a BPA by providing false and misleading information to GSA contracting officials. Specifically, SAIC was successfully able to convince a man named Steve Stallings to pose as an employee of the Senior Executive Staff of the Department of Defense and the Director of another federal agency. The bulk of the task orders SAIC received under the BPA for the United States Central Command at MacDill Air Force Base in Tampa, Florida.

The government alleged that while Stallings claimed he was a black ops agent working for a secret government agency, none of his claims were true. In fact, Stallings was just an average civilian who happened to be working in a building that also housed the Tampa headquarters of defense contractor, SAIC. The official complaint alleged that SAIC and Stallings were able to create a bogus government agency, which ultimately ended up receiving a BPA and defrauding the Department of Defense and American taxpayers out of millions of dollars.

The Whistleblower

During his time working at Nellis Air Force Base, retired Air Force Lt. Colonel Tim Ferner had a feeling that something just was not right with SAICs business. As the qui tam whistleblower in this case, Lt. Colonel Ferner discovered what he believed to be a defense fraud scheme that was orchestrated by SAIC.

Lt. Colonel Ferner was able to find out that the defense contractor was billing the United States government for special secret services that were allegedly being provided for the U.S. Special Operations Command and Centcom at MacDill Air Force base and NASA at Cape Canaveral. The problem, however, was that SAIC was billing the government for work that was never performed or provided.

Very disturbed by the fraudulent activity going on at SAIC, Lt. Colonel Ferner decided to come forward with the information and report to his base commander. After voicing his concerns, Lt. Colonel Ferner says that his base commander told him that they were “both close to retirement” and if he were willing to “let the whole thing go, we could both get jobs as defense contractors and be set for life.”

Lt. Colonel Ferner said it was at this point he realized just how deep the fraudulent activity with the defense contractor reached. He knew he had to do something to put an end to the scheme, so he decided to locate an experienced qui tam attorney. Lt. Colonel Ferner scheduled a consultation and, after discussing his legal options, decided to proceed with a qui tam action. With the legal guidance of his qui tam lawyer, he filed a complaint under the whistleblower provisions of the False Claims Act.

Whistleblowers and Workplace Retaliation

Lt. Colonel Ferner said that no one would have expected him to blow the whistle on the defense fraud scheme, but it was something he felt he had to do. After filing the False Claims Act suit, he began to experience workplace retaliation. Lt. Colonel Ferner said he was shunned at work and sworn at by superiors. Worse than that, while he was being treated for cancer in a Nevada hospital, Lt. Colonel Ferner said his boss put his name on a list of military volunteers who were being shipped out to Afghanistan.

Qui Tam Whistleblowers and the False Claims Act

Under the whistleblower provisions of the False Claims Act, a private citizen is able to consult with a qui tam lawyer and file suit on behalf of the government. If successful in the suit, the whistleblower may share in the monetary recovery.  For coming forward with vital information in this case, Lt. Colonel Ferner will receive a relator’s share of $977,500.