Colorado Security Contractor Resolves Overcharging
Allegations Related to Its Work in Iraq and Afghanistan

The Macalan Group Inc., formerly known as NEK Advanced Securities Inc. (NEK), a security contractor headquartered in Colorado Springs, Colo., has agreed to resolve allegations that it submitted false claims in connection with a contract with the Joint Improvised Explosive Device Defeat Organization (JIEDDO), the Justice Department announced today.  NEK’s contract with JIEDDO required it to develop and deploy teams of specialized personnel to Iraq and Afghanistan to combat improvised explosive devices.

“We are committed to pursuing contractors who fail to accurately bill the government,” said Stuart F. Delery, Assistant Attorney General for the Civil Division.  “The Justice Department will continue to ensure that those who do business with the government do so honestly and fairly and uphold the integrity of our public contracting process.”

“No government contract is more important than one that supports the security efforts of our nation overseas,” said John Walsh, U. S. Attorney for the District of Colorado.  “When a contractor fails to bill by the contract rules set up to protect American taxpayers, our office will diligently and aggressively seek to recover any losses, as this case demonstrates.”

 
The government alleged that NEK submitted false invoices for payment in connection with this contract that claimed excessive or unallowable costs.  The most significant of these costs related to lease fees for equipment used under the contract.  The government also alleged that NEK was prohibited from charging lease fees that exceeded the price NEK paid to purchase the equipment.  To resolve these allegations, NEK will pay the government $2.08 million and also will relinquish an outstanding invoice for $744,969 and turn over numerous weapons and accessories acquired under the contract. 

This settlement was the result of a coordinated effort by the Department of Justice’s Civil Division, Commercial Litigation Branch; the U.S. Attorney’s Office for the District of Colorado and the Defense Contract Management Agency.  The claims resolved by this settlement are allegations only, and there has been no determination of liability.