SAIC to pay $11.75M to settle whistle-blower lawsuit

June 13, 2013 at 4:49 PM

ALBUQUERQUE, June 13 (UPI) -- A whistle-blower lawsuit against Science Applications International Corp. is being settled with an $11.75 million payment to the U.S. government.

The lawsuit brought by Phillips and Cohen LLP on behalf of an unidentified client, alleged that SAIC had "cheated the government out of millions of dollars" under a training program that was part of the government's Weapons of Mass Destruction First Responder Program.

"If SAIC had been honest and charged the government based on its true costs, additional funds would have been available to train more first responders," said Peter W. Chatfield, an attorney with Phillips and Cohen.

"We continue to see how important first responder training is to deal with terrorist attacks -- most recently in Boston. So it's important to train as many first responders as possible with the government funds that are allocated."

The first-responder program was established by Congress in response to the 1995 Oklahoma City bombing. SAIC worked as a subcontractor to New Mexico Institute of Mining and Technology, which has received government funding for the program.

SAIC received the award on "a sole-source basis and was required to provide accurate information about its costs and profits but the lawsuit said the company "falsely certified" that its costs included payment for full-time employees who received fringe benefits to conduct the training.

Instead, SAIC used cheaper, part-time employees who received few benefits, the lawsuit said.

"Both the federal government and New Mexico Tech relied on SAIC to provide accurate information about its costs," said Tim McCormack, an attorney with Phillips and Cohen. "We alleged that SAIC instead inflated its costs so that it could capture roughly one-third of New Mexico Tech's total appropriation."

The whistle-blower was Richard Priem, who was a SAIC project manager for the WMD First Responder Program and other training programs at New Mexico Tech.

The whistle-blower lawsuit was filed in federal district court in Albuquerque, where Priem lives.

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