Netcracker Technology Corp. and Computer Sciences Corp. Agree to Settle Civil False Claims Act Allegations

NetCracker Technology Corp. has agreed to pay $11.4 million and Computer Sciences Corp. (CSC) has agreed to pay $1.35 million to resolve allegations under the False Claims Act that they used individuals without security clearances on a Defense Information Systems Agency (DISA) contract, the Justice Department announced today.  NetCracker is a telecom software and services company headquartered in Waltham, Massachusetts, and CSC is an information technology services company with its headquarters in Falls Church, Virginia. 

“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Principal Deputy Assistant Attorney General Benjamin C. Mizer, head of the Justice Department’s Civil Division.  “We will continue to ensure that the government receives what it pays for when federal monies are used to purchase services.”

“Companies that do business with the federal government have a responsibility to fully meet the terms of their contracts,” said U.S. Attorney Channing D. Phillips of the District of Columbia. “In addition to holding these two companies accountable for their contracting obligations, this settlement shows that the U.S. Attorney’s Office will take appropriate measures necessary to ensure the integrity of government communications systems.”

“This NetCracker case is a prime example of how the DISA IG works to detect and prevent fraud schemes within the Agency and recuperate funds for the U.S. government,” said Colonel Bill Eger, Inspector General (IG) of DISA.

NetCracker and CSC implemented software used to help manage the telecommunications network used by the U.S. Department of Defense.  The work was done pursuant to a contract with DISA, under which CSC was the prime contractor and NetCracker was a CSC subcontractor.  From 2008 through 2013, NetCracker allegedly used employees without security clearances to perform work when it knew the contract required those individuals to have security clearances, resulting in CSC recklessly submitting false claims for payment to DISA. 

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.  The civil lawsuit was filed in    the District of Columbia by John Kingsley, a former NetCracker employee.  Mr. Kingsley will receive $2,358,750 as his share of the recovery in this case.

This resolution in this matter was the result of a coordinated effort between the U.S. Attorney’s Office of the District of Columbia, the Civil Division’s Commercial Litigation branch and the DISA IG Office.

The lawsuit is captioned United States ex rel. Kingsley v. NetCracker Technology Corp. Civil Action 1:11-cv-00629 (D.D.C.).  The claims resolved by this settlement are allegations only, and there has been no determination of liability.