The consulting firm, Booz Allen Hamilton, has reached an agreement to pay a substantial sum of $377.5 million in order to settle a federal lawsuit filed against them for fraudulent billing of the U.S. government. This announcement was made by the Justice Department on Friday.
According to the Justice Department’s news release, the settlement resolves allegations that Booz Allen improperly charged the government for indirect costs that should have been billed under their commercial and international contracts between 2011 and 2021. The government accused the firm of seeking reimbursement for costs related to commercial activities that did not benefit the United States.
Indirect costs for a consulting firm can include various expenses such as equipment, marketing, and office space. Booz Allen, headquartered in McLean, Va., holds lucrative defense and intelligence contracts with the federal government. Investigators started examining the firm’s billing practices in 2016.
Brian M. Boynton, the principal deputy assistant attorney and head of the Justice Department’s civil division, emphasized the importance of government contractors maintaining honesty in billing practices, stating, “Government contractors must turn square corners when billing the government for costs under government contracts.”
Matthew M. Graves, the U.S. attorney for the District of Columbia, described the settlement as “one of the largest procurement fraud settlements in history” in the news release.
In response to the settlement, a spokeswoman for Booz Allen expressed the company’s belief that they had acted lawfully and responsibly. The spokeswoman further explained that the decision to settle the civil inquiry was based on pragmatic business reasons, aiming to avoid the delays, uncertainty, and expenses of a lengthy litigation process. The company did not want to engage in a prolonged court battle with their largest client, the U.S. government, regarding an immensely complex matter.
It is worth noting that a parallel criminal investigation into the allegations by the Justice Department concluded in 2021 without any charges. However, an ongoing investigation by the Securities and Exchange Commission remains in progress.
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