Computer Sciences Corporation: Uncleared Personnel Behind the Prime Contractor’s Bill

In the Computer Sciences Corporation DISA settlement, CSC agreed to pay $1.35 million to resolve allegations that it recklessly submitted claims for work performed by personnel without required security clearances. The allegation concerned employees of its subcontractor, NetCracker Technology Corp., while CSC held the government’s contract. For someone who knew the assignments, the clearance status or the billing, the connection matters: the staffing decision and the government claim sat at different companies.

CSC was an information technology services company, and NetCracker supplied telecommunications software and services. They implemented software that helped manage the Defense Department’s telecommunications network under a contract with the Defense Information Systems Agency. The Justice Department announced their civil settlement on November 2, 2015.

What CSC and NetCracker Allegedly Did

The Justice Department alleged that NetCracker knowingly used personnel without required security clearances from 2008 through 2013. According to the department, NetCracker knew the contract required those employees to have clearances for the work they performed. The department alleged that this conduct resulted in CSC recklessly submitting false claims for payment to the Defense Information Systems Agency.

NetCracker separately agreed to pay $11.4 million. The company supplying the personnel agreed to the larger settlement, while the prime submitting the claims also agreed to pay. We see the absurdity in the government’s account: a clearance requirement for defense communications work allegedly disappeared between the contract and the people doing it. Some handoff.

How Subcontracted Work Reached CSC’s Claim

A prime contractor contracts directly with the government, while a first-tier subcontractor supplies that prime. A company can occupy different positions on different awards. We follow its role on the particular work because that identifies whose staffing representations and payment requests we need to understand. In a claim involving both companies, the supplier’s performance and the prime’s payment request can be separate parts of the same alleged false claim. The government alleged that this was the connection between NetCracker’s staffing and CSC’s claims to the agency.

In examining a similar concern, we would connect what the subcontractor represented about its personnel with what reached the prime before it billed the agency. The government said CSC billed recklessly, putting what reached CSC before it billed at the heart of its alleged role.

Transparency International Defence and Security’s 2022 report Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict describes how missing subcontractor information can hide where government money goes. In its examination of private military and security companies, the report puts the gap plainly:

For an insider, the useful connection may sit between those businesses. Someone at the supplier may know the staff actually assigned, while someone at the prime may know the information used to support the government’s bill. We work with that difference in perspective when examining whether the staffing promise and the payment claim tell the same story.

A Subcontractor Employee Brought the Case

A former NetCracker employee filed the qui tam case in the District of Columbia under the False Claims Act. The settlement resolved that case against NetCracker and CSC. The person who brought it came from the subcontractor, giving this prime-contractor settlement a starting point inside the business supplying the work.

What Evidence Is Needed to Prove Fraud?

We connect the contract’s clearance requirement, the people on the work, their clearance status and the bill with the insider who saw the assignments or billing. We examine the records behind that connection, including what passed between the subcontractor and the prime. The contract and its modifications identify the requirement for the particular work, while assignments and clearance information show who performed it and their status during that period. A staffing or security employee may understand that part of the concern before seeing how the work reached a government bill.

The payment request connects those staffing questions to government money. Different line items can use different pricing arrangements, so we match the personnel issue to the work and payment request it affected. For prime oversight, we also examine what the people responsible for staffing, supervision and billing were told. A message about an employee’s clearance status can matter differently depending on which assignment it concerns and who received it before a claim went out.

A Different CSC Staffing Allegation

CSC’s Army resume settlement concerned qualifications used to obtain higher-paid labor categories. The Justice Department’s April 15, 2014 announcement described a $1.1 million settlement over allegations that CSC supplied falsified resumes on an Army information technology task order. In that matter, the alleged mismatch was between the worker’s qualifications and the category supporting the charge.

The Defense Information Systems Agency allegation concerned the security clearances required for the work. We see the same basic problem alleged in both matters: the people behind the government’s bill did not match the contract’s staffing promise. The Army matter turned on qualifications for a higher-paid category; the communications work turned on required clearances.

The Whistleblower’s Share

The settlement announcement said the former NetCracker employee would receive $2.36 million as the whistleblower’s share of the recovery in the case involving both companies. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers.

You Know Who Was Assigned and What Was Billed

If you saw clearance requirements disappear between staffing and billing, speak to our whistleblower experts about the personnel behind the government’s bill. We connect your knowledge of the personnel and the prime’s decisions to the payment issue, then bring in defense contractor fraud whistleblower lawyers who understand clearance-related claims. You have us alongside you from that first conversation through the work of building and pursuing your case.