Consulting firm Booz Allen Hamilton has agreed to pay $377.5 million to settle a federal lawsuit accused of making false claims to the U.S. government, the Justice Department said Friday.
In a news release, the Justice Department said the settlement resolves allegations that Booz Allen improperly billed the government for overhead costs due under commercial and international contracts between 2011 and 2021. The government claimed that the company “obtained reimbursement from the government for the cost of commercial activities that did not bring any benefit to the United States.”
Overhead costs for consulting firms may include expenses such as equipment, marketing, and office space.
Based in McLean, Virginia, Booz Allen has lucrative defense and intelligence contracts with the federal government. Investigators began investigating the company’s billing practices in 2016.
“Government contractors have to turn the corner when billing the government for costs under government contracts,” Brian M. Boynton, chief assistant attorney and director of the Department of Justice’s Civil Division, said in a statement.
Matthew M. Graves, a US attorney for the District of Columbia, said in a news release that the settlement is “one of the largest procurement fraud settlements in history.”
A Booz Allen spokeswoman said in a statement Friday that the company believed it had acted “legitimately and responsibly.”
“We have decided to settle this civil investigation for pragmatic business reasons to avoid the delays, uncertainties and costs of protracted litigation,” the spokesperson said. “The company didn’t want to be embroiled in a potentially multi-year legal battle with its biggest customer, the US government, over a very complex issue.”
A parallel criminal investigation into the allegations by the Justice Department closed in 2021 without charges. An investigation by the Securities and Exchange Commission is ongoing.