Company that provided employment to disabled pays $400,000 to settle False Claims Act allegations

by Ben Vernia | July 12th, 2011

On July 11, the Department of Justice announced a settlement with California-based PRIDE, Industries, a company that provides disabled employees to work maintenance services at military bases. According to DOJ’s press release:

PRIDE Industries, and its subsidiary, PRIDE Industries One, has agreed to pay the United States $400,000 to resolve allegations that it knowingly submitted false claims relating to a contract to provide maintenance services at the Department of the Army’s Ft. Bliss Army Base in El Paso, Texas, the Justice Department announced today.

The maintenance contract at Ft. Bliss is part of the AbilityOne Program, which procures contracts for goods or services in order to provide employment opportunities to people who are blind or have other significant disabilities. Under this mandatory source program managed by the Committee for Purchase From People Who Are Blind or Severely Disabled, a federal agency, contractors must ensure that 75 percent of all direct labor hours are performed by severely disabled employees. Between 2007 and 2010, PRIDE, which is based in Roseville, Calif., employed a large number of temporary, non-disabled employees as part of its maintenance staff but did not count their hours as part of its overall ratio. Accordingly, PRIDE reported false ratio numbers to NISH, the central nonprofit agency designated by the committee to help oversee the AbilityOne Program, as well as to the committee itself.

In addition, PRIDE overcharged the Department of the Army under its maintenance contract by adding unallowable costs and charging too much for labor.

The case was originally filed by two whistleblowers, who will share a $68,000 award (a relator’s share of 17%).

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