Uncleared Personnel on Defense Contracts: Who Was Authorized to Do the Billed Work?

Defense contractor false claims involving uncleared personnel connect a broken staffing promise to a government bill: the contract required security clearances, and the company used people who lacked them. Someone in staffing, security or program management may know which employees actually did the work and when they were authorized to do it. That knowledge can expose a difference between the personnel taxpayers paid for and the people the contractor supplied.

DISA Contractor Personnel Without Required Clearances

Defense Information Systems Agency contractor personnel without required clearances were at the center of the government’s allegations against NetCracker Technology Corp. and Computer Sciences Corp. The companies implemented software that helped manage the Defense Department’s telecommunications network. Computer Sciences Corp., known as CSC, held the prime contract with the agency, while NetCracker supplied work as CSC’s subcontractor.

The Justice Department alleged that, from 2008 through 2013, NetCracker used employees without security clearances even though it knew the contract required those individuals to have them. According to the department, that conduct resulted in CSC recklessly submitting false claims for payment to the agency.

In its November 2015 settlement announcement, the Justice Department said NetCracker agreed to pay $11.4 million and CSC agreed to pay $1.35 million to resolve those allegations. A former NetCracker employee brought the whistleblower case. We see a telling contrast in those payments: the subcontractor supplying the workers agreed to pay more than the prime submitting the bills.

The staffing condition was part of what the agency bought. We see the problem in the government’s allegation plainly: a subcontractor allegedly supplied people it knew lacked required clearances, and the prime’s bills reached the government anyway.

Defense Employee Qualifications Versus Security Clearances

Defense employee qualifications and security clearances support different fraud allegations because they answer different questions about the promised staff. Qualifications concern the experience, education or skills required for the work or billing category. A contractually required clearance concerns whether the person has the security approval the assignment demands.

CSC faced a separate settlement over allegedly falsified employee resumes in 2014. That matter concerned an Army information technology task order and personnel allegedly placed in higher-paid labor categories through false resumes. The alleged overbilling depended on the qualifications supporting the rate charged.

The NetCracker allegation concerned the security clearances required for the software work. The comparison starts with the particular promise in the contract: the qualifications supporting a billed category, the required clearance, and any access authorization needed for the assignment. We examine those requirements separately against what the company represented about its people.

Cybersecurity fraud concerns another promise. In its MORSECORP settlement announcement, the Justice Department described the company’s admissions that it had failed to implement required security controls and lacked required system security plans on Army and Air Force contracts. We examine those system protections separately from whether an employee had the clearance an assignment required.

How Does a Subcontractor’s Work Reach the Prime’s Bill?

A subcontractor’s staffing decisions can reach the government through the prime’s payment claims. In the NetCracker case, the Justice Department alleged that the subcontractor’s knowing use of uncleared personnel resulted in the prime’s reckless claims. We follow both sides: what the subcontractor supplied and what the prime asked the government to pay for.

Contract language determines how the work becomes a payment request. We connect the staffing assurance to the actual contract and claim, whether the company billed hours or sought payment for a promised service.

Which personnel did the subcontractor assign, what did it represent about their clearances, and what information reached the prime? We then examine who approved the work, what the prime submitted and what the people handling the claim knew about the staffing gap.

Transparency International Defence and Security’s 2022 report, Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, proposes making the invoice reveal who supplied the work:

For a personnel case, we take that question down to the assignment: who supplied the worker whose services entered the bill? We line up the staffing records and the payment request for the same work and period.

Records That Connect Personnel to the Bill

We compare the contract’s personnel requirement with who actually did the billed work and their authorization at the time. Dates matter: a clearance obtained later leaves a separate question about work billed during the earlier gap.

A staffing manager may recognize the person on the roster, a security employee the authorization gap, and a billing employee the claim that carried the charge. Their knowledge becomes more useful when it points to the same assignment and billing period.

Level 3 Allegations Show the Clearance Gap on the Bill

A whistleblower’s complaint against Level 3 Communications described billing during a wait for security clearance on a Homeland Security contract. The complaint attributed responsibility for the required personnel clearances and access to the contractor.

The whistleblower alleged that other employees performed the new hire’s work for months while he waited for clearance. According to the complaint, he received his full salary while having very little real work to perform. The next allegation connected that staffing situation directly to payment:

The alleged discrepancy was visible to someone who knew the assignments: other people covered the work while the government paid for the employee awaiting clearance. We would compare that account with the staffing, authorization and billing records for the same period. The complaint gives a concrete reason to connect those records instead of looking at a clearance date alone.

What a Staffing Insider Can Bring to a Whistleblower Case

The former NetCracker employee who brought the qui tam case was to receive about $2.36 million as a share of the recovery, according to the Justice Department’s announcement. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

Your starting point may be the assignment you supervised, the clearance status you handled or the bill you questioned. We use what you know about the work, the billing and the decisions behind them to build your strongest defense contractor whistleblower case. If concerns about whistleblower protection are part of the decision to speak, we address them with you.

You Know Who Did the Work

Speak to one of our Whistleblower Experts about who really did the billed work, whether you worked for the prime or its subcontractor. We can start with a conversation about the assignment and billing concern without asking you to send classified material. We stay beside you as we build your case and bring in defense contractor fraud whistleblower lawyers who understand personnel requirements and government payment claims.