SAIC faces challenge in False Claims defense

SAIC claims the lawsuit is false, but one expert says that the company is playing a game of chicken with the Justice Department

Science Applications International Corp. could face a real challenge in fighting federal bid rigging allegations, according to a legal watchdog firm.

The Justice Department announced on July 2 that it was joining a whistleblower’s False Claims Act lawsuit against SAIC regarding a 2004 contract worth up to $3.2 billion, which the General Services Administration had awarded to the contractor. The lawsuit claims that SAIC engaged in a scheme to bias the contract in its favor.

Under the False Claims Act, a private party can file an action on behalf of the United States and receive a portion of the amount recovered. The Justice Department typically joins fewer than 100 cases annually out of about 350 False Claims Act cases filed, said Patrick Burns, a spokesman for Taxpayers Against Fraud, a watchdog group.

“For the Justice Department to take on a case like this is rare,” Burns said. “SAIC needs to settle this. They are playing a game of chicken with the Justice Department, and if they foolishly decide to go to a jury, good luck with that.”

An SAIC spokeswoman said the company is cooperating and the allegations are false. “We believe the government’s legal claims are without merit and we intend to vigorously defend against them,” Melissa Koskovich said in an e-mailed statement on July 7.

The lawsuit alleges that SAIC, its subcontractor Applied Enterprise Solutions and the chief executive of that company; along with two Naval officials, all conspired to rig the contract selection in favor of SAIC. The contract pertained to work for a Navy facility in Mississippi in 2004.

The case was filed by whistleblower David Magee, a former employee at the facility.

Another watchdog group, the Project on Government Oversight, said SAIC apparently was investigated for similar accusations in the past on a different contract. The group made that claim in a blog entry posted on July 7.

POGO reviewed documents through a Freedom of Information Act regarding an Energy Department investigation into SAIC contract activities starting in 2001. The case involved possible violations in a $90 million SAIC contract to provide IT services to an Energy Department facility in Washington State.

“The five-year investigation resulted in no punishment to SAIC, although the company probably dodged a bullet,” POGO said.

SAIC said it did nothing wrong in that case, either. “The record shows that this matter was thoroughly investigated by the government and that no action against SAIC was taken. That outcome speaks for itself,” Koskovich said.

About the Author

Alice Lipowicz is a staff writer covering government 2.0, homeland security and other IT policies for Federal Computer Week.

Featured

  • Telecommunications
    Stock photo ID: 658810513 By asharkyu

    GSA extends EIS deadline to 2023

    Agencies are getting up to three more years on existing telecom contracts before having to shift to the $50 billion Enterprise Infrastructure Solutions vehicle.

  • Workforce
    Shutterstock image ID: 569172169 By Zenzen

    OMB looks to retrain feds to fill cyber needs

    The federal government is taking steps to fill high-demand, skills-gap positions in tech by retraining employees already working within agencies without a cyber or IT background.

  • Acquisition
    GSA Headquarters (Photo by Rena Schild/Shutterstock)

    GSA to consolidate multiple award schedules

    The General Services Administration plans to consolidate dozens of its buying schedules across product areas including IT and services to reduce duplication.

Stay Connected

FCW Update

Sign up for our newsletter.

I agree to this site's Privacy Policy.