Navmar Applied Sciences Corporation Agrees to $4.4 Million Settlement
Double Billing Allegations
Navmar Applied Sciences Corporation (Navmar), headquartered in Pennsylvania, has reached a $4.4 million settlement to address allegations of violating the False Claims Act.
The United States alleged that Navmar knowingly engaged in double billing and improperly shifted labor and material costs under a series of contracts with the Department of the Navy (Navy).
These contracts were intended for the development, design, and testing of emerging intelligence, surveillance, and reconnaissance technologies.
Double Billing and Cost Shifting
The United States asserted that Navmar knowingly billed specific labor and material costs on one Navy contract and subsequently billed the same costs on another contract, effectively receiving payment twice for the same expenses.
Additionally, Navmar was accused of knowingly and improperly shifting material costs from certain contracts to others.
This practice violated the Federal Acquisition Regulation requirement that costs incurred under a contract must be allocable to that specific contract.
As a result, Navmar recovered costs it should not have received.
Principal Deputy Assistant Attorney General Brian M. Boynton, who heads the Justice Department’s Civil Division, emphasized the importance of accurate billing when conducting business with the government. He stated, “Companies that do business with the government must ensure that they are properly billing the government for the goods or services that they provide.”
Boynton emphasized the government’s commitment to holding accountable those who misuse taxpayer funds.
Warning to Defense Contractors
U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania underscored the significance of cases like this, stating that they should serve as a warning to defense contractors.
She asserted that false claims have no place in military procurement, and the government takes appropriate action when taxpayer dollars are misused.
Priority for Defense Criminal Investigative Service (DCIS)
Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office highlighted that investigating cost mischarging on Department of Defense (DoD) contracts is a top priority for DCIS.
This law enforcement arm of the DoD Office of Inspector General is dedicated to protecting the integrity of the DoD procurement process.
Collaboration with other agencies, including the Naval Criminal Investigative Service (NCIS) and the Justice Department, is essential in achieving this goal.
National Security Concerns
Special Agent in Charge Greg Gross of the NCIS Economic Crime Field Office emphasized the national security implications of procurement fraud.
He stated that such fraud poses a significant threat to military readiness and national security.
NCIS remains committed to investigating all allegations of fraud that damage the integrity of the Department of the Navy procurement process.
Coordinated Effort and Resolution
The resolution of this matter was the result of a coordinated effort involving various entities. The Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney’s Office for the Eastern District of Pennsylvania worked together, with assistance from the DCIS, NCIS, Defense Contract Audit Agency, and Defense Contract Management Agency.
Handling of the Case
The case was handled by Trial Attorney K.L. Grace Moseley of the Justice Department’s Civil Division and Assistant U.S. Attorneys Landon Jones and Mark Sherer for the Eastern District of Pennsylvania.
No Determination of Liability
It’s important to note that the claims resolved by the settlement are allegations only, and there has been no determination of liability at this stage.