DRS Technical Services: The Qualifications Behind the Government’s Bill
In the DRS Technical Services settlement, the company agreed to pay $13.7 million to resolve allegations that it overbilled the government for work by employees who lacked the qualifications the contracts required. The alleged mismatch connected the personnel file to the government invoice: the government alleged that DRS charged for labor categories that the assigned employees did not qualify for. If you know who filled the position and which rate reached the bill, you may see the same contradiction from inside the business.
The U.S. Attorney’s Office for the District of Maryland and the Justice Department’s Civil Division announced the settlement on October 7, 2014. It covered alleged overbilling on Army contracts supporting work in Iraq and Afghanistan and on Coast Guard aircraft-maintenance work. The allegation concerned underqualified labor on defense contracts, with the employee’s qualifications tied directly to the price the government paid.
What DRS Was Contracted to Do
DRS designed, integrated, operated and maintained satellite and wireless networks, telecommunications services and security systems. DRS C3 & Aviation, an indirect subsidiary, provided aircraft maintenance, logistics, depot support and engineering support to government agencies.
DRS and its predecessors held time-and-materials contracts for services and supplies to the Army’s Communication and Electronics Command, and to the Coast Guard for aircraft maintenance. Those payment terms make the staffing requirement part of the billing story. A contract category describes the qualified labor the customer agreed to buy, and its rate sets the price for that labor.
How Labor Qualifications Reached the Bill
A time-and-materials contract pays qualifying labor hours at fixed category rates. The federal acquisition rule for these contracts describes rates that include wages, overhead, general and administrative expenses, and profit. The billed rate therefore reaches beyond the worker’s paycheck: it is the price attached to supplying labor that meets the contract’s requirements.
The government alleged that DRS billed the Army command for individuals whose qualifications did not meet all the requirements of the categories charged. That allegedly increased both the amount DRS claimed and the amount the Army paid. The qualification was doing financial work on the invoice.
We see a basic bargain turned upside down: the government allegedly paid the qualified-labor rate without getting qualified labor. The qualification belongs in the work, not just in the price. For an insider, the useful comparison runs from the requirement to the person assigned and then to the category billed.
The Army and Coast Guard Billing Periods
The government alleged that the Army overbilling ran from January 1, 2003 through December 31, 2012. The Coast Guard allegation covered December 19, 2009 through December 18, 2011. The government said DRS charged the Coast Guard’s Aviation Logistics Center for work by people who lacked the qualifications the contract prescribed, inflating the cost of the services.
The same alleged mismatch reached different government customers under different contracts. That is why we keep the worker, requirement and billed period together when examining a qualification claim. A staffing history becomes useful evidence when it can be connected to the particular contract and charges it affected.
Who Investigated the Allegations?
The U.S. Attorney’s Office for the District of Maryland and the Justice Department’s Civil Division investigated the DRS allegations. They worked with the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Army Criminal Investigation Command’s Major Procurement Fraud Unit.
Qualification problems also appear in the government’s cost-audit work. The Defense Department Office of Inspector General summarized a separate Defense Contract Audit Agency audit in its Semiannual Report to the Congress for April through September 2018. The audit questioned subcontract labor costs associated with employees who did not meet contract qualifications. That finding puts the same comparison inside the accounting records: whose labor was charged, and what qualifications the contract required.
What Evidence Is Needed to Prove Fraud?
For qualification-based billing, the useful evidence connects the contract requirement, the employee’s credentials, the work period and the category charged. We examine the contract and its modifications alongside the staffing and billing records. A resume describes a worker’s background, while a time entry places work on a job and an invoice identifies what the government was charged.
A staffing specialist may know the experience claimed for a person assigned to a category. A program supervisor may know the work that person performed, and a billing employee may know which rate was used. We bring those views together around the same assignment and payment request, so the qualification issue stays connected to government money.
From a Staffing Mismatch to a Whistleblower Case
The DRS settlement resolved False Claims Act allegations about the qualifications behind government labor charges. For someone seeing a similar mismatch, we examine how the employee’s background, category assignment and payment records fit into a defense contractor whistleblower claim. The starting point is the part of that connection you know firsthand.
A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Our work with you connects what you saw inside staffing or billing to the qualifications the government paid for and the people who approved the charges.
You Know Who Qualified for the Rate
If the staffing file and the government bill tell different stories, speak to one of our Whistleblower Experts about the labor charges. We build your case around the qualification that was promised and the billing decision you saw, and bring in defense contractor fraud whistleblower lawyers who understand labor-category disputes. We stay beside you as your partners from the first conversation through the pursuit of a recovery.
