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Parsons Engineering Pays $3.2 Million to Settle Pentagon Overbilling Case

October 11, 1995

WASHINGTON (AP) _ Parsons Engineering Sciences Inc. will pay the government $3,225,000 to settle allegations it overbilled the Air Force, the Justice Department announced Wednesday.

Assistant Attorney General Frank Hunger, head of the civil division, said the payment would settle a lawsuit filed in U.S. District Court in Raleigh, N.C., on April 21, 1993, by J.R. Tucker, a former employee of Parsons, which is headquartered in Pasadena, Calif.

Tucker, who filed suit on behalf of the government under the private whistleblower provisions of the False Claims Act, will receive $354,750 of the settlement as compensation for bringing the matter to light.

The Justice Department said a government investigation showed that Parsons charged the Air Force for employees’ labor at a rate too high for their work experience. The investigation showed the overcharge may have been unintentional at the start but continued after the company discovered the problem, the department said.

Parsons told the government about the excessive billing six months after discovering the error and offered to correct the bills for an amount that grossly underestimated the mischarged amount, the department said.

``We hope this settlement sends the message that there is no `grace period’ for internal investigation while a contractor continues to submit knowingly inflated bills to the government,″ Hunger said. ``We are pleased, however, that Parsons worked with us to identify the problem and compensate the government for the excessive charges.″

The settlement involved mischarges at Brooks Air Force Base in Texas for six months from late 1992 through early 1993 on two contracts under which Parsons billed a total of $76 million for environmental surveys and services.

Parsons said in a statement that it discovered an error in its billing system on the Brooks air base project and that the company, rather than Tucker, was the first to notify the government of the error.

``We have corrected the procedures which led to the overbilling and have cooperated fully with the Air Force and the Department of Justice,″ said Kevin Kelly, a company spokesman. Kelly noted that Parsons was recently awarded a multi-year, follow-on contract for one of same projects.

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