The Department of Justice wants the U.S. Civilian Board of Contract Appeals to lift a stay with implications for a False Claims Act lawsuit against a Department of Energy contractor, Mission Support Alliance, before a federal court in Washington state.
The Leidos-led Mission Support Alliance (MSA), which recently ended its nearly 12-year run as landlord for DOE’s Hanford Site, opposes the move. The Leidos-Centerra team was replaced this week by another team made up of Leidos, Centerra and Parsons.
In February 2019 Justice filed suit against MSA and related defendants alleging false claims and kickbacks from 2010 to 2015.
The Justice case in federal district court centers around MSA’s award of an information technology subcontract to Lockheed Martin Services Inc., which occurred while another Lockheed Martin Corp. subsidiary was the primary owner of MSA. Lockheed’s share of the Hanford contractor was sold to Leidos in 2016.
The parties agree that many of the facts in the fraud case in the Eastern District of Washington mirror a dispute before the contract appeals board.
Justice claims DOE was overcharged roughly $63 million because Lockheed Martin reaped double profits – both as chief owner of MSA and also as the owner of the information services subcontractor.
On Dec. 18, Justice filed a motion with the contract appeals board in Washington, D.C., seeking to lift the stay on one key issue in the case there —whether the information technology services should be considered “commercial” under Federal Acquisition Regulations. Commercial services are commonly used by the general public or non-governmental entities.
This is an important distinction because if the Lockheed Martin subcontractor’s information services were deemed “commercial” then it “could charge profit” and the government’s False Claims Act case “collapses,” according to an MSA motion filed last week.
But MSA opposed lifting the stay and appeared to prefer resolving the issue in the court, rather than before the Civilian Board of Contract Appeals. Attorneys for the contractor said the U.S. District Court case is just beginning discovery in the court case, and that the company does not want to duplicate the effort before the board. In addition, certain defendants in the district court, including Lockheed and a former Lockheed executive Frank Armijo are not parties in the contract board case, MSA said.
In a letter to the U.S. District Court Judge Rosanna Peterson, MSA said Justice apparently has not informed the court of its desire to litigate the commercial question before the contract board, “much less sought [Peterson’s] permission” to do so, as Contract Disputes Act requires.