The Justice Department on Friday said that Lockheed Martin [LMT] has agreed to pay the government $27.5 million to settle allegations of contract overbilling related to two Army contracts.
The Justice Department charged Lockheed Martin Integrated Systems under the False Claims Act with mischarging on the Rapid Response and Strategic Services Sourcing contracts that were issued by the Army Communications and Electronics Command. The contracts provide the Army with rapid access to products and services for forces in Iraq and Afghanistan.
The DoJ said the company used under-qualified employees who were billed to the Army at rates of more qualified employees, allegedly leading to more profit for the Integrated Systems business.
“This settlement should remind all who do business with the government that there is a price to pay for fudging the math,” U.S. Attorney Paul Fishman said in a statement.
In a statement, Lockheed Martin said it “settled to avoid the distraction and risks of litigation and to allow us to focus on the critical and important work we are performing now and will perform in the future for our customers. We voluntarily disclosed the issues to the government and have fully cooperated with the government in their resolution. Lockheed Martin and the Department of Justice agree that the settlement is not an admission of liability or wrongdoing.”