Government Contractor Settles Whistleblower’s Lawsuit

Vector Planning and Services, Inc., doing business as VPSI, has agreed to settle allegations made by a whistleblower in a qui tam complaint that it violated the False Claims Act.

VPSI is a government contractor that provides information technology, systems engineering, program management, and consulting to numerous agencies of the federal government including the U.S. Navy. According to its website, VPSI is based in Chantilly, Virginia with administrative operations in San Diego, California. VPSI reportedly also provides services in Arizona, Colorado, Florida, Hawaii, Illinois, Louisiana, Maryland, Missouri, South Carolina, and Washington State.

According to the complaint filed under the qui tam provisions of the False Claims Act, VPSI has multiple “sole source” contacts with the Navy to provide information technology and other services. A sole source contract, also called a no-bid contract, is one in which there has been no competitive bidding; rather a specific entity is selected to provide services at a price negotiated with the government.

The whistleblower alleged in the qui tam complaint that VPSI submitted inflated claims for payment of its indirect costs. The government claims that the contracts provided that VPSI could bill the government for its indirect costs that could not be allocated to any particular contract, such as overhead costs. The government alleged that VPSI knowingly submitted inflated bills for its indirect costs during the period 2005 to 2009 in violation of the False Claims Act. Specifically, the complaint alleged that VPSI improperly included claims for its direct costs that had already been paid, or billed for costs that had not been incurred.

The whistleblower, Hai Ba Trung, a former VPSI employee, alleged that VPSI terminated him after he reported VPSI’s alleged wrongdoing to the government.

According to the Justice Department, VPSI has agreed to pay $6.5 million to settle the government’s and whistleblower’s allegations. The whistleblower will receive approximately $1.28 million of the settlement amount as his reward under the qui tam provisions of the False Claims Act.

The False Claims Act permits private parties to initiate litigation on behalf of the government against individuals or entities who have allegedly committed government fraud. If you know about fraud on the government, click here to see if you may have a case.