NetCracker Technology: Uncleared Personnel on DISA Work

In the NetCracker Technology settlement, the company agreed to pay $11.4 million to resolve allegations that it knowingly used personnel without required security clearances on a Defense Information Systems Agency contract. The government’s allegation connected the people doing the software work to the claims submitted for payment. If you knew the assignments, the clearance status or what the prime contractor was told, that connection is the part of this case you may recognize.

The Justice Department announced the civil settlement on November 2, 2015. Computer Sciences Corp., commonly called CSC, held the agency’s prime contract, and NetCracker worked as its subcontractor. A former NetCracker employee brought the whistleblower case.

What NetCracker Allegedly Supplied on DISA Work

NetCracker and CSC implemented software used to help manage the Defense Department’s telecommunications network. NetCracker was a telecom software and services company headquartered in Waltham, Massachusetts.

From 2008 through 2013, the government alleged, NetCracker used employees without security clearances even though it knew the contract required those individuals to have them. The staffing requirement reached the people performing the work. In the government’s account, knowing what the software did was only part of understanding what the agency had bought; who worked on it mattered too.

We expect a contract requiring cleared people to buy work by cleared people. Yet the government alleged that taxpayers were asked to pay for work by employees without those clearances. On the Defense Department’s telecommunications network, of all places.

How the Clearance Allegation Reached the Government’s Bill

The government alleged that NetCracker’s use of uncleared personnel resulted in CSC recklessly submitting false claims for payment to the Defense Information Systems Agency. That put the subcontractor’s staffing and the prime’s billing in the same civil case.

The Justice Department described the companies’ alleged knowledge differently. It said NetCracker knew the clearance requirement and described CSC’s submission of claims as reckless. Those descriptions direct attention to different decisions: who assigned the personnel, what information reached the prime, and what the prime relied on when it sought payment. We would examine the communications between those decisions alongside the work and billing records.

Who Was Behind the Invoice?

A later study of private military and security companies explained how missing subcontractor information can hide who receives government money. In Hidden Costs: US Private Military and Security Companies and the Risks of Corruption and Conflict, Transparency International Defence and Security found that gaps in subcontractor information obscured potential conflicts of interest and the extent of government funding reaching those companies.

The report recommended that invoice reporting identify subcontractors, their beneficial owners and the itemized value of their services. It called for information about companies beyond the first and second subcontracting tiers, too. Its recommendation puts the supplier information where the money is being requested:

The report’s focus was private military and security companies, but its invoice recommendation speaks to the separation at issue here: the supplier doing the work can sit behind another company’s bill. For the NetCracker allegation, naming the subcontractor would begin the inquiry, while identifying the people assigned to the software work would take it further. The person who knows the software team may be able to explain something the prime’s bill does not show.

That makes the staffing decision central to what we would examine with an insider. A description of the service, the company supplying it and the people assigned to it answers different questions. In this case, the government’s allegation turned on the last of those: whether the employees doing the work had the required clearances.

The Separate Settlements and the Whistleblower’s Share

CSC’s separate $1.35 million settlement was smaller than NetCracker’s, even though CSC held the prime contract. Its role was the prime contractor submitting claims, while the government’s account placed the alleged use of uncleared employees at NetCracker.

The former employee filed the qui tam case in the District of Columbia under the False Claims Act’s whistleblower provision. The announcement said the former employee would receive about $2.36 million as his share of the recovery from the case against both companies. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. Here, the person who brought the case had worked for the subcontractor whose personnel were at the center of the allegation.

What Evidence Is Needed to Prove Fraud?

For an uncleared-personnel allegation, the useful evidence connects the contract requirement, the actual work and the payment claim. We would compare the clearance requirement for the assignment with personnel authorization and access records from the same period. Task assignments and software-work records could identify who performed the service. Communications about staffing could help explain who knew the requirement and who knew the employees’ status. Together, those comparisons would connect the concern inside the team to the service the government was paying for.

The other part of the comparison is what crossed from subcontractor to prime and from prime to government. We would examine what the subcontractor submitted about its work, what the prime received, and how that work appeared in the claim sent to the agency. A staffing or security employee may understand the authorization question, while someone managing the subcontract or billing may understand what reached the prime. Your knowledge of a particular assignment, discussion or payment request can give the records behind a defense contractor whistleblower case meaning.

Bring Us the Staffing and Billing Connection

If you know who performed restricted software work and what the prime was told, speak to one of our Whistleblower Experts about the staffing behind the bill. We build the case around your knowledge of the assignments and payment claims, and bring in defense contractor fraud whistleblower lawyers who understand personnel-clearance disputes. We stay beside you, from the first conversation through the case, as we work to recover government money.