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CyTerra Corp. to Pay $1.9 Million to Settle Alleged False Claims Act Violations

July 19, 2013 — Government contractors have obligations to negotiate fairly and honestly with the government. The federal False Claims Act is the tool that enables the government to collaborate with tipsters and informants to attack fraud against the government. The qui tam provisions of the act authorize whistleblowers to file suit on behalf of the government and share in any financial recovery from the lawsuit.

Defense Contractor Allegedly Provided Inaccurate Pricing Data for Mine Detector Contracts

Defense contractor CyTerra Corp. will pay the federal government $1.9 million to settle allegations that it failed to provide the U. S. Army with accurate and complete cost/pricing data connected with its sales of mine detectors, according to the Justice Department. CyTerra is a manufacturer of portable mine detectors and other equipment used by the military.

CyTerra entered into a contract with the Navy in 2003 to produce and deliver AN/PSS-14 hand-held mine detection units. Over time, the contract was modified to provide additional mine detection units. The government alleged that during negotiations on the contract modifications, CyTerra violated the Truth in Negotiations Act by knowingly failing to provide the Army with accurate, complete and current cost/pricing data concerning the number of labor hours required to produce a mine detector. Federal authorities alleged that, with accurate data, the government would have negotiated a lower price.

The allegations originally came to light in a whistleblower lawsuit filed by two former CyTerra executives. The two whistleblowers will share $361,000 from the settlement.

Insiders Can Help Stop Fraud by Tipping Federal Authorities

Insiders like these former CyTerra employees have unique access to critical information about violations of the False Claims Act, and their collaboration is vital to federal authorities. Before tipsters contact the authorities, though, it is important to understand their rights under the False Claims Act. The experienced qui tam lawyers at Waters & Kraus provide skilled counsel to whistleblowers every day. Contact us by email or phone our whistleblower attorneys at 855.784.0268 to find out how we can assist you and protect your rights.

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