The United States settled for $1.1 million allegations that Middleburg-based Islands Mechanical Contractor Inc. improperly submitted claims for standby or delay costs associated with construction contracts at Naval Station Guantanamo Bay.
“Fraud is not a victimless crime, and puts our Sailors and Marines at greater risk. The American taxpayers are also victims as the blatant and wrongful misuse of American taxpayer dollars not only erodes the public trust but also diminishes the Department of Navy’s ability to obtain the best technology, services and equipment for our brave military members,” said Thomas Cannizzo, special agent in charge of the Naval Criminal Investigative Service Southeast Field Office, in a news release.
The settlement was Aug. 20.
IMC is a defense contractor that provides construction services at Naval Station Guantanamo Bay. The company agreed to construct a facility at Guantanamo Bay, but delays occurred.
IMC submitted requests for equitable adjustment for additional standby and delay costs, but the government alleged that IMC’s claims for equipment and labor costs were inflated and based on misrepresented, incomplete and insufficient data.
The Defense Contract Audit Agency determined that the claimed equipment was not needed for the relevant project, the actual age of the equipment did not match the claimed equipment age and that the equipment was diverted to other projects instead of being placed on standby.
The agency also found that the workers claimed to be on standby were reallocated to other projects and the payroll records supporting their standby status were falsified.
The case was investigated by the Naval Criminal Investigative Service, the Defense Contract Audit Agency, and Assistant U.S. Attorney Shea Gibbons.
The claims resolved by the settlement are allegations only and there has been no determination of liability, the release states.