On September 18, the Department of Justice announced that Navmar Applied Sciences Corporation (“Navmar”), a Pennsylvania-based company that has provided services to the Department of Defense since 1977, reached an agreement to pay $4.4 million to resolve allegations under the False Claims Act.
The allegations against Navmar centered on claims that the company knowingly billed certain labor and material costs on one Navy contract and subsequently billed the same costs on another contract, resulting in double payment for the same expenses. Additionally, it was alleged that Navmar knowingly and improperly shifted material costs incurred under certain contracts to other contracts, a practice that violates the Federal Acquisition Regulation requirement that costs incurred under a contract must be allocable to that specific contract. This practice led to Navmar allegedly recovering costs that it otherwise would not have been entitled to.
Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division, emphasized the importance of companies conducting business with the government to ensure accurate billing for goods and services, stating “We will hold accountable those who misuse taxpayer funds for their own self-enrichment.”
U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania, echoed this sentiment, saying, “This settlement demonstrates the Justice Department’s commitment to take appropriate action when it determines that taxpayer dollars have been double-billed and improperly accounted for. Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”
While the settlement reached between Navmar and the Department of Justice resolved allegations, there was no determination of liability.
The attorneys at Chilivis Grubman represent clients of all types and sizes in connection with white-collar criminal investigations and false claims allegations. If you need assistance with such a matter, please contact us today.