The Department of Justice has accused Lockheed Martin Corporation, certain affiliated companies, and at least one executive of making false claims against the government and accepting kickbacks in regard to a multibillion-dollar contract. The contract was to clean up a nuclear site in Hanford, Washington.
The defendants in the government’s lawsuit include Lockheed Martin Corporation, Lockheed Martin Services, Inc. (LMSI), and Mission Support Alliance LLC (MSA), along with companies that owned or were affiliated with MSA at points during the contracting process, including Lockheed Martin Integrated Technology LLC. The activities described took place between Jan. 1, 2010, through June 2016.
According to the government, MSA awarded its affiliate LMSI a $232 million subcontract to manage and provide technology solution services for the cleanup project. This subcontract was allegedly awarded without competition, and may have been the result of payments exceeding $1 million that LMSI made to MSA and a Lockheed Martin executive. The Justice Department characterizes this as an illegal kickback.
Additionally, the defendants are alleged to have knowingly making false statements to the Department of Energy about the amount of profit included in the subcontract. That profit was inflated, and billing at the inflated rate allegedly violates the False Claims Act.
“Fraud, corruption, and self-dealing at Hanford will simply not be tolerated,” said the U.S. Attorney for the Eastern District of Washington. “The critical mission of cleaning up the Hanford Site in a safe, timely, environmentally responsible, and cost-effective manner is too important to the public and the residents of this region.”
A spokesperson for Lockheed Martin denied the allegations. She told Reuters that the company “rejects the suggestion that the corporation or its executives engaged in any wrongdoing. Lockheed Martin will defend this matter vigorously.”
The lawsuit could result in potentially millions of dollars in recovery for the United States. If the allegations had been brought by a whistleblower, that person could have received between 15 and 30 percent of the total recovery as a reward for their actions.
This case, although unproven as yet, serves to illustrate that fraud, waste and abuse can be found in any type of government contract and can be difficult to identify and prove. The government relies on private citizens to blow the whistle on such behavior in the public interest.
You may be in a position to notice fraud in government contracting and blow the whistle on it. Before you take any concrete steps, however, you should discuss the situation with an attorney familiar with whistleblower laws to ensure you receive your reward and to minimize any retaliation you may face.