VPSI, Navy contractor, pays $6.5 million to settle cost mischarging allegations

by Ben Vernia | February 18th, 2014

On February 18, the Department of Justice announced that Virginia-based VPSI, a Navy contractor, has agreed to pay $6.2 million to settle allegations originally brought by a whistleblower that it mischarged indirect costs to Navy contracts. According to DOJ’s press release:

Vector Planning and Services Inc. (VPSI), an information technology, systems engineering, program management and consulting firm headquartered in Chantilly, Va. , has agreed to pay the government $6.5 million to settle False Claims Act allegations that the company inflated claims for payment under several Navy contracts, the Justice Department announced today. VPSI’s West Coast center of operations is in San Diego, Calif.
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VPSI has a number of contracts with the Navy and its contractors to provide information technology, systems engineering and management consulting services. Under these contracts, VPSI is entitled to bill the government for its indirect costs, which are costs such as overhead that cannot be allocated directly to a particular contract. The government alleged that, from 2005 to 2009, VPSI inflated its indirect cost billings to the government by improperly including direct costs, for which it had already been paid, in indirect cost accounts that were then allocated across its government contracts and billed again. The government further alleged that VPSI submitted claims for other costs that were never incurred.

The government announced that the relator will receive $1.28 million (a 19.7% relator’s share).

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