Admin. Financial Violations (PI/PS) Contractor Fraud

Published by the National Science Foundation, Office of Inspector General on 2013-12-16.

Below is a raw (and likely hideous) rendition of the original report. (PDF)

                                                      NATIONAL SCIENCE FOUNDATION
                                                       OFFICE OF INSPECTOR GENERAL
                                                         OFFICE OF INVESTIGATIONS

                                                CLOSEOUT MEMORANDUM

Case Number: 106010002                                                                                Page 1 of 1

        We investigated contract overcharges by a contractor 1 that provided support for the U.S.
        Antarctic Program. Audits ofthe contractor's annual incurred costs for the first several years of
        the contract had resulted in findings that the contractor improperly charged certain indirect costs
        as direct costs to the contract? This method of charging costs was inconsistent with its
        Disclosure Statement and not in compliance with applicable Cost Accounting Standards.

         Our investigation developed evidence supporting referral of the matter to the U.S. Attorney for
         the Eastern District of Virginia for consideration of civil action under the False Claims Act.
         Although the U.S. Attorney's office 'conducted extensive negotiations with the contractor and its
         counsel and, upon reaching impasse, sought permission from the Department of Justice to
         proceed with litigation, the Department of Justice elected to return the matter to NSF for
         administrative disposition. The U.S. Attorney accordingly returned the matter to NSF OIG to
         work with NSF to develop a resolution.

         NSF and the contractor, in coordination with the Defense Contract Management Agency, agreed
         that the contractor mischarged $10.8 million of indirect costs as direct costs. 3 Taking into
         account an additional $600,000 in indirect costs and award fees linked to these mischarged direct
         costs, NSF recovered a total of $11.4 million.

         Accordingly, this case is closed.

           Raytheon Technical Services Company, acting through its business unit Raytheon Polar Services Company.
           Contract No. OPP 0000373
           The audit fmdings were that $14.2 million in indirect costs had been charged as direct costs.

NSF OIG Form 2 (11/02)