SAIC/Leidos Pays $1.5 Million to Settle FCA Suit

The Justice Department announced today that Science Applications International Corporation, now known as Leidos Holdings Inc., has agreed to pay $1.5 million to resolve a False Claims Act lawsuit alleging that it knowingly engaged in prohibited conflicts of interest as a contractor for the Nuclear Regulatory Commission.

Between 1992 and 2000, SAIC held two contracts with the NRC to provide scientific and technical services, including assisting the NRC in its consideration of a rule that could have permitted the release or recycling of certain types and quantities of material with very low levels of radioactivity below regulatory safety limits.   NRC decided not to proceed with such a rule.

The government alleged that, under these contracts, SAIC was required to avoid conflicting business relationships that could bias SAIC’s work for the NRC.  The government alleged that SAIC repeatedly and falsely certified that it had no such conflicting business relationships, when SAIC actually engaged in multiple business relationships with entities that had a financial interest in the outcome of the rulemaking.

In July 2008, a jury returned a verdict in favor of the government that SAIC violated the FCA and breached its contract  by engaging in undisclosed conflicts of interest.   On appeal, the Court of Appeals for the District of Columbia Circuit affirmed judgment for the government on the breach of contract claim, but partially reversed the judgment on the FCA claims based on two jury instructions and remanded the case for a new trial on those claims.

For more information, see the DOJ release.

About William Van Huis

Bill Van Huis is a Senior Writer/Analyst for Wolters Kluwer Law & Business who tracks and analyzes new regulations impacting federal government contracting. He also follows court decisions involving bid protests and contract disputes. You can find his work in WK publications like Government Contract Reports and the FAR and DFARS Matrix Tools. Bill is a Certified Professional Contracts Manager, and he has a law degree from Southern Illinois University, where he graduated summa cum laude. Prior to joining WK, Bill worked both inside and outside state and local government in the areas of procurement and municipal finance. Bill also worked as a staff attorney for the Illinois Supreme Court.
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