Berg Companies, Bid Rigging, Washington 2021

Bid Rigging Scheme Costs Contractor $3.3 Million

A Spokane-based defense contractor has agreed to pay $3.3 million to resolve allegations that it participated in a bid rigging scheme to submit false claims to the Defense Logistics Agency (DLA) in Washington.

Berg Companies Inc. (Berg) admitted that from 2019 to 2021, it coordinated with Noble Supply & Logistics (Noble) and two other Noble vendors to submit inflated quotes for Berg-made rigid wall shelters. The quotes were submitted to win awards at inflated prices, resulting in overcharged sales to the military.

The scheme involved two separate solicitations, one for the sale of 10 Berg-made rigid wall shelters to a New Mexico-based vendor and another for the purchase of 29 Berg-made rigid wall shelters to a Florida-based vendor. The United States alleges that the requirements were not competed as required by the prime vendor contract, leading to overcharging of military customers.

“Bid rigging of this type inhibits competition on the products and on prices, thereby creating the risk that the government is purchasing inferior products at exorbitant prices,” said Assistant Attorney General Brett Shumate of the Justice Department’s Civil Division. “This settlement reinforces the Department’s commitment in using the FCA to pursue anti-competitive fraud.”

The settlement is a result of an investigation by the U.S. Attorney’s Office for the District of Massachusetts and the U.S. Attorney’s Office for the District of New Mexico, in conjunction with the Department of Defense’s Defense Logistics Agency. Berg Companies Inc. cooperated with the government to resolve this matter and admitted to the wrongdoing.

The case is a reminder that the government will hold accountable those who engage in anti-competitive practices and manipulate the procurement process to their advantage. The settlement serves as a warning to other contractors who may be tempted to engage in similar schemes.

Berg Companies Inc. is a defense contractor based in Spokane, Washington, and manufactures rigid wall shelters. It was acquired by Hunter Defense Technologies, Inc. in September 2019, which is a defense contractor based in Solon, Ohio.

Mandatory Facts:

Defendant/Respondent: Berg Companies Inc.

Criminal Charges: Violating the False Claims Act by submitting false claims under prime vendor contracts with the Defense Logistics Agency.

City and State: Spokane, Washington

Exact Date: 2019-2021

Sentence or Outcome: Berg Companies Inc. agreed to pay $3.3 million to resolve the allegations.

Dollar Amounts: $3.3 million

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