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Fake Claims Cost Contractor Big
SYRACUSE, NEW YORK – Alutiiq Diversified Services, LLC (“Alutiiq”) paid $683,987 to resolve claims that it improperly billed the United States Army for the construction of a shoot house located at Fort Drum, announced United States Attorney Grant C. Jaquith.
The investigation revealed that the subcontractor responsible for making the Shock Absorbing Concrete (“SACON”) did not follow the SACON specifications, delivering hundreds of SACON blocks that were outside the density parameters. Moreover, there were no records showing that the subcontractor performed compressive strength testing at the required time, and the limited strength testing records that were available showed that some SACON blocks were outside the maximum strength limit even when tested too early.
The investigation also uncovered a SACON block with makeshift rebar in the form of nail and wire embedded inside the block, a condition that increases bullet ricochet risk. Alutiiq submitted quality control reports for the SACON work certifying that it was performed in accordance with the contract requirements but did not actually confirm before submitting its claims for payment that the SACON subcontractor had manufactured the SACON properly.
“Accurate claims are essential in all government contracts to protect the public purse and the safety of those who use the purchased product,” said United States Attorney Grant C. Jaquith. “This case underscores the importance of that principle, involving false claims about the reliability of materials to reduce the risk to our soldiers during live-fire combat training.
United States Attorney Grant C. Jaquith continued, “The settlement agreement reflects Alutiiq’s failure to carry out its quality control obligations, its submission of false claims, and its cooperative work to resolve this case by paying a substantial sum of money and fixing the shoot house so the Army has the safe setting needed to train soldiers to defend our nation.”
The investigation was a joint effort between the Defense Criminal Investigative Service (DCIS), the U.S. Army Criminal Investigation Command, and the U.S. Attorney’s Office, Northern District of New York. The integrity of the DoD supply chain is of vital importance to America’s Armed Forces and its national security, and the DCIS will continue to work with its law enforcement partners to hold Defense Contractors accountable to contract requirements ensuring quality products and services are provided to the U.S. military.
Alutiiq has agreed to remediate the shoot house at no cost to the government and has already begun work on correcting the issues. This settlement further demonstrates the resolve of the U.S. Army Criminal Investigation Command’s (USACIDC) Major Procurement Fraud Unit and our law enforcement partners to protect and defend the assets of the United States Army.
Key Facts
- State: New York
- Category: Fraud & Financial Crimes
- Source: DOJ Press Release â†â€â€
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