Vector Planning and Services Inc. (VPSI), an information technology, systems engineering, program management and consulting firm headquartered in Chantilly, Va. ,  has agreed to pay the government $6.5 million to settle False Claims Act allegations that the company inflated claims for payment under several Navy contracts, the Justice Department announced today.   VPSI’s West Coast center of operations is in  San Diego, Calif.

“The Department of Justice will vigorously protect taxpayer funds from false claims,” said Assistant Attorney General for the Justice Department’s Civil Division Stuart F. Delery.   “Contractors who wish to do business with the military must act with honesty and integrity, or they will be held accountable for their actions.”

VPSI has a number of contracts with the Navy and its contractors to provide information technology, systems engineering and management consulting services.   Under these contracts, VPSI is entitled to bill the government for its indirect costs, which are costs such as overhead that cannot be allocated directly to a particular contract.   The government alleged that, from 2005 to 2009, VPSI inflated its indirect cost billings to the government by improperly including direct costs, for which it had already been paid, in indirect cost accounts that were then allocated across its government contracts and billed again.   The government further alleged that VPSI submitted claims for other costs that were never incurred.

“Our office will work aggressively with our investigative partners to protect taxpayer funds from abuse,” said U.S. Attorney for the Southern District of California Laura E. Duffy.   “Today’s settlement demonstrates our commitment to pursue defense contractors who knowingly defraud or overcharge military programs.”

The allegations resolved by the settlement were originally brought by a whistleblower in the U.S. District Court for the Southern District of California, under the  qui tam, or whistleblower, provisions of the False Claims Act.   The Act permits private parties to sue, on behalf of the government, companies and individuals who have falsely claimed federal funds and to share in any recovery.   The whistleblower in this case will receive  $1.28 million.

This settlement is the result of a coordinated effort by the Justice Department’s Civil Division, the Civil and Criminal Divisions of the U.S. Attorney’s Office for the Southern District of California, the Defense Criminal Investigative Service, the Naval Criminal Investigative Service and the Defense Contract Audit Agency.

The case is captioned United States ex rel. Hai Ba Trung v. Vector Planning and Services Inc., et al., 3:12-cv-02353-LAB-BGS (S.D. Calif.).   The claims settled by this agreement are allegations only; there has been no determination of liability.