by Ben Vernia | March 8th, 2013
On March 8, the Department of Justice announced that Corning, Inc., the New York-based glassware manufacturer, has agreed to settle claims originally brought by a False Claims Act whistleblower that the company defrauded the General Services Administration by providing incomplete, or “defective” pricing information for laboratory glassware purchased by the government. According to DOJ’s press release:
Corning Incorporated has agreed to pay the U nited States $5.65 million to resolve claims that it knowingly presented false claims to the United States for laboratory research products sold to federal agencies through Corning’s Life Sciences division. Corning, a New York based corporation, creates and makes glass and ceramic components for consumer electronics, mobile emissions controls, telecommunications and life sciences.
The settlement resolves claims relating to a contract entered into by Corning in 2005 to sell laboratory research products to federal government entities through the General Services Administration’s (GSA) Multiple Award Schedule (MAS) program. The MAS program provides the government and other General Services Administration authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and the ease of administration that comes from selling to hundreds of government purchasers under one central contract, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms.
The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Corning knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Corning knowingly made false statements to GSA about its sales practices and discounts . The settlement further resolves allegations that Corning knowingly failed to comply with the price reduction clause of its GSA contract by failing to disclose to GSA discounts Corning gave to its commercial customers when they were higher than the discounts that Corning had disclosed to GSA, and by failing to pass those discounts on to government customers. The United States alleged that, because of these improper dealings, it received lower discounts and ultimately paid far more than it should have for Corning products.
The DOJ announced that the relator will receive $904,000 (a 16% relator’s share).
