by Ben Vernia | February 1st, 2016
On February 1, the Department of Justice announced that Centerra Services Int’l, Inc., formerly known as Wackenhut Services LLC, had agreed to pay $7.4 million to resolve civil allegations, originally brought by a whistleblower, that the company defrauded the Department of Defense for security services provided in Iraq. According to DOJ’s press release:
Centerra Services International Inc., formerly known as Wackenhut Services LLC, has agreed to pay $7.4 million to resolve allegations that Wackenhut violated the False Claims Act by double billing and inflating labor costs in connection with a contract for firefighting and fire protection services in Iraq, the Department of Justice announced today. Centerra is a security services company headquartered in Palm Beach Gardens, Florida.
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Wackenhut provided U.S. military bases with firefighting and fire protection services under a subcontract with Kellogg Brown & Root Inc. (KBR), the prime contractor for the Army’s contract for logistical support in the military theater, known as LOGCAP III. LOGCAP III is the third generation of contracts under the Army’s Logistical Civil Augmentation Program. The government alleged that from 2008 to 2010, Wackenhut inflated its labor costs by billing the salaries of certain managers as direct costs under the subcontract, when those salaries had already been charged as indirect costs. The government further alleged that Wackenhut artificially inflated its labor rate by counting its costs for holidays, vacation, sick leave, rest and recuperation and other variable labor costs twice in calculating the rate. Wackenhut billed KBR, which then passed on the costs to the government under LOGCAP III.
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The Government announced that the whistleblower will receive $1.332 million of the settlement (an 18% relator’s share).
