Mine-detector company pays $1.9 million to settle defective pricing allegations

by Ben Vernia | July 2nd, 2013

On July 2, the Department of Justice announced that CyTerra, a manufacturer of mine detectors, had agreed to pay nearly $2 million to resolve False Claims Act allegations that the company provided inaccurate (“defective”) pricing data in bidding on government contracts. According to DOJ’s press release:

CyTerra Corporation has agreed to pay the federal government $1.9 million to resolve civil liability arising from its failure to provide the U. S. Department of the Army with accurate, complete and current cost or pricing data for its sales of mine detectors, the Justice Department announced today. CyTerra, headquartered in Waltham, Mass., manufactures equipment, including portable mine detectors, used by the U. S. military.
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In 2003, the Department of the Army awarded CyTerra a contract for the production and delivery of AN/PSS-14 hand-held mine detection units. The contract was modified several times to provide for the production and delivery of additional mine detection units. The government contended that, in connection with the negotiations concerning three of these contract modifications, CyTerra knowingly failed to provide the Army with the most recent cost or pricing data on the number of labor hours needed to produce a mine detector. Under the Truth in Negotiations Act, CyTerra was required to provide cost or pricing data that was “accurate, complete and current.” The government alleged that if the Army had received such information, it would have negotiated a lower price.

DOJ announced that the case was originally brought by two whistleblowers, former CyTerra executives, who will receive $361,000 of the settlement (a 19% relators’ share).

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