A group of enlisted Marines patrol near Observation Post Shrine in the Kajaki District, Afghanistan, on March 16, 2012

A group of enlisted Marines patrol near Observation Post Shrine in the Kajaki District, Afghanistan, on March 16, 2012 U.S. Marine Corps photo by Sgt. Jacob Harrer

Lockheed Contractor Must Repay $27.5M for Overcharging Troops in Iraq and Afghanistan

A Lockheed Martin contractor agrees to repay the government for overbilling for its products and services to U.S. troops in Iraq and Afghanistan. By Charles S. Clark

A defense contractor producing products and services for U.S. troops in Iraq and Afghanistan agreed on Friday to repay the government $27.5 million to settle overbilling charges brought under the False Claims Act.

The Justice Department announced on Friday that Lockheed Martin Integrated Systems overbilled the Pentagon for work performed by employees who “lacked required job qualifications” but whose work was billed at the rate for qualified ones, allegedly to inflate profits.

“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said acting Assistant Attorney General Joyce Branda. “The department will ensure that those who do business with the government, and seek taxpayer funds, do so fairly and in accordance with the applicable rules.”

The subsidiary of Bethesda, Md.-based Lockheed Martin Inc., has a Rapid Response contract and a Strategic Services Sourcing contract with the U.S. Army Communications and Electronics Command to deliver products and services to troops overseas.

“This settlement demonstrates the commitment of the Defense Criminal Investigative Service and our partners to vigorously pursue alleged violations of the False Claims Act,” said Special Agent in Charge Craig Rupert of the DCIS Northeast Field Office. “All contractors doing business with the federal government are expected to abide by the acquisition rules no matter who they are.  Investigations of such allegations are necessary to protect American taxpayers and our warfighters.”

Lockheed Martin issued a statement saying it had “settled to avoid the distraction and risks of litigation and to allow us to focus on the critical and important work we are performing now and will perform in the future for our customers. We voluntarily disclosed the issues to the government and have fully cooperated with the government in their resolution. Lockheed Martin and the Department of Justice agree that the settlement is not an admission of liability or wrongdoing.”