IT contractors pay nearly $12.8 million to settle whistleblower case involving security clearances

by Ben Vernia | November 7th, 2015

On November 2, the Department of Justice announced that two information technology contractors, Netcracker Technology Corp. and Computer Sciences Corp., had agreed to pay a combined $12.75 million to resolve civil charges, originally brought a whistleblower, that the companies defrauded the Department of Defense by failing to use employees with security clearances on a contract. According to DOJ’s press release:

NetCracker Technology Corp. has agreed to pay $11.4 million and Computer Sciences Corp. (CSC) has agreed to pay $1.35 million to resolve allegations under the False Claims Act that they used individuals without security clearances on a Defense Information Systems Agency (DISA) contract, the Justice Department announced today.  NetCracker is a telecom software and services company headquartered in Waltham, Massachusetts, and CSC is an information technology services company with its headquarters in Falls Church, Virginia.

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NetCracker and CSC implemented software used to help manage the telecommunications network used by the U.S. Department of Defense.  The work was done pursuant to a contract with DISA, under which CSC was the prime contractor and NetCracker was a CSC subcontractor.  From 2008 through 2013, NetCracker allegedly used employees without security clearances to perform work when it knew the contract required those individuals to have security clearances, resulting in CSC recklessly submitting false claims for payment to DISA.

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The Department announced that the whistleblower, a former Netcracker employee, will receive $2,358,750 of the settlement (a relator’s share of 18.5%).

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