The settlement resolves claims relating to a contract entered into by Corning in 2005 to sell laboratory research products to federal government entities through the General Services Administration’s (GSA) Multiple Award Schedule (MAS) program.   The MAS program provides the government and other General Services Administration authorized purchasers with a streamlined process for procurement of commonly-used commercial goods and services. To be awarded a MAS contract, and thereby gain access to the broad government marketplace and the ease of administration that comes from selling to hundreds of government purchasers under one central contract, contractors must agree to disclose commercial pricing policies and practices, and to abide by the contract terms.

The settlement resolves allegations that, in contract negotiations and over the course of the contract’s administration, Corning knowingly failed to meet its contractual obligations to provide GSA with current, accurate and complete information about its commercial sales practices, including discounts offered to other customers, and that Corning knowingly made false statements to GSA about its sales practices and discounts .   The settlement further resolves allegations that Corning knowingly failed to comply with the price reduction clause of its GSA contract by failing to disclose to GSA discounts Corning gave to its commercial customers when they were higher than the discounts that Corning had disclosed to GSA, and by failing to pass those discounts on to government customers.   The United States alleged that, because of these improper dealings, it received lower discounts and ultimately paid far more than it should have for Corning products.

“This settlement shows that the United States expects all contractors participating in the MAS program to make full and accurate disclosures of their commercial pricing practices to the GSA and to act in good faith when dealing with the United States government,” said Stuart F. Delery, Principal Deputy Assistant Attorney General for the Department of Justice’s Civil Division.   “The failure to make full and accurate disclosures material to the government’s contracting processes will not be tolerated.”

 “At a time when our political leaders are making tough choices about how to rein in federal spending, government contractors need to understand that they will not get away with overbilling the taxpayer,” said U.S. Attorney for the District of Columbia Ronald C. Machen Jr.  “Companies that want to take advantage of federal contracts are obligated to deal openly and fairly with their government customers.  When contractors fail to meet their obligations, we will hold them accountable and seek to make the taxpayer whole.”

“Contractors need to be honest and follow through with their promises to the federal government – or pay the consequences,” said Brian D. Miller, Inspector General for the General Services Administration.

The settlement resolves a lawsuit filed in the U.S. District Court for the District of Columbia by a former Corning Life Sciences sales representative Kevin Jones under the qui tam, or whistleblower provisions, of the False Claims Act.   Under the Act, private citizens may bring suit for false claims on behalf of the United States and share in any recovery obtained by the government.   Mr. Jones will receive $904,000 as his share of the government’s recovery.

This settlement was the result of a coordinated effort by the U.S. Attorney’s Office for the District of Columbia; the Department of Justice, Civil Division, Commercial Litigation Branch; and the GSA’s Office of Inspector General in investigating the allegations in this case.   The claims settled by this agreement are allegations only, and there has been no determination of liability.