DynCorp Targeted with $150 Million Fraud Claim for Northrop Grumman Subcontract
Two employees have filed a lawsuit against DynCorp International Inc., a private military contractor that specializes in aviation facilities, training and equipment. According to the complaint, the employees allege that the company illegally overcharged for labor when it subcontracted its services to Northrop Grumman Corp. as part of a U.S. Army contract in Afghanistan. If true, this would be a violation of the False Claims Act.
In the suit, which seeks $150 million in damages from DynCorp International, the plaintiffs claim the company hired unqualified workers and paid them far below the rates required for government contract work, but it continued to bill for its services at the regular fixed rates. The employees also say that they warned DynCorp officials about the illegal practices, but senior managers failed to make any adjustments.
In total, the claimants estimate that the damages caused to the government by DynCorp or Northrop equal about $50 million. The U.S. government has yet to intervene in the case, but does reserve the right to do so under federal law.
The False Claims Act, first enacted in 1863, covers liability issues when government contractors are accused of engaging in fraudulent activity. In addition to penalties imposed on individuals and organizations committing this fraud, the law also provides rewards and protections to whistleblowers who expose the wrongdoing. In fact, these individuals could receive as much as 15 to 20 percent of the total damages awarded if the lawsuit against the alleged fraudsters is successful.
Although this lawsuit is likely far from being resolved, it’s clear that the two employees made full use of the protections offered to them through federal whistleblower law.