Booz Allen Agrees to Pay $377.45 Million to Settle False Claims Act Allegations
Booz Allen Hamilton Holding Corporation has agreed to pay the United States a settlement of $377,453,150 to resolve allegations of violating the False Claims Act. The allegations involved improper billing practices, where Booz Allen wrongly charged commercial and international costs to its government contracts. The company, headquartered in McLean, Virginia, offers management, consulting, and engineering services to both government and non-government customers.
In accordance with government contracting rules, costs charged to a government contract must be directly related to the contract’s objectives. This includes both direct costs tied to the contract and indirect costs that benefit multiple contracts, including government contracts. However, costs with no relationship to the government contract are prohibited from being charged to it. This measure prevents the misuse of taxpayer funds to subsidize non-governmental work.
The settlement resolves allegations covering the period from approximately 2011 to 2021. It was alleged that Booz Allen improperly allocated indirect costs from its commercial and international business to its government contracts and subcontracts. Some of these costs had no connection to the relevant contracts, while others were disproportionately allocated. Additionally, Booz Allen failed to disclose the methods used to account for costs related to its commercial and international operations, resulting in reimbursement from the government for costs that did not benefit the United States.
The case was brought under the False Claims Act’s qui tam provision, allowing private individuals to sue on behalf of the United States for false claims and share in the recovered funds. The whistleblower in this case will receive over $69 million as part of the settlement as a whistleblower reward