
A recent resolution in a high-profile legal battle underscores the essential role whistleblowers play in uncovering fraud among government contractors.
Gen Digital Inc., previously known as Symantec Corp., will pay a staggering $55.1 million to settle claims of overcharging under a General Services Administration (GSA) contract.
While the specific amount awarded to the whistleblower who sparked this qui tam lawsuit remains undecided, it’s typical for whistleblowers to receive between 15% and 25% of the total recovery by the government.
Case Overview
This settlement came about following the government’s successful litigation under the False Claims Act.
The allegations asserted that Symantec had provided false information during the negotiation phase of the GSA contract and continued to breach its obligations thereafter.
The U.S. Attorney for the District of Columbia reaffirmed their dedication to pursuing fraud cases that waste taxpayer money.
They emphasized their readiness to take legal action, potentially leading to trial, in order to uphold justice.
Key Developments
After a rigorous four-week bench trial in 2022, the court concluded that Symantec had engaged in misrepresentation and failed to comply with contractual standards, leading to inflated pricing under the GSA agreement.
The court found that from the contract’s initial discussions in 2006 until its termination in 2012, Symantec’s false claims and certifications compromised the integrity of the contract.
Throughout this timeframe, the company inaccurately presented its commercial sales data, resulting in the GSA unintentionally agreeing to inflated prices.
Moreover, Symantec repeatedly infringed upon the Price Reduction Clause, a standard requirement in Multiple Award Schedule Contracts that mandates fair pricing alignment between GSA rates and those offered to commercial clients, thus denying the government its rightful discounts.
As part of the settlement, Gen Digital agreed to pay $55.1 million, which includes $16.1 million for damages and $36.8 million in civil penalties, alongside additional costs and interest accrued after the judgment.
Lori Morsell, a former employee responsible for overseeing the contract, courageously came forward as the whistleblower in this case.
Insights on Government Contracts and the False Claims Act
Under the False Claims Act, it’s imperative for contractors to provide accurate and comprehensive information during the contract negotiation phases.
Misrepresentation—whether deliberate or inadvertent—can result in severe legal and financial consequences.
The Price Reduction Clause holds particular significance in federal contracts, ensuring that government entities receive fair pricing.
Contractors should vigilantly monitor and align their GSA pricing with their commercial strategies to avoid future conflicts.
The case against Gen Digital highlights the importance of whistleblowers who possess the insider knowledge necessary to expose fraudulent actions in government contracting.
The provisions in the False Claims Act protect whistleblowers from retaliation, granting them legal avenues to defend themselves against repercussions such as job loss, demotion, or harassment for revealing instances of government fraud.
Source: Natlawreview