Consulting firm Booz Allen Hamilton has agreed to pay $377.5 million to settle a federal lawsuit that accused it of falsely billing the US government, the Justice Department said Friday.
The Justice Department said in a news release that the settlement resolves allegations that, between 2011 and 2021, Booz Allen improperly charged the government for indirect costs that it should have billed under its commercial and international contracts. The government alleged that the company “received reimbursement from the government for the cost of business activities that did not benefit the United States.”
Indirect costs of a consulting firm can include expenses such as equipment, marketing and office space.
Booz Allen, which is based in McLean, Virginia, has lucrative defense and intelligence contracts with the federal government. Investigators began a review of the firm’s billing practices in 2016.
“Government contractors should exercise caution when billing the government for costs under government contracts,” Brian M. Boynton, principal deputy assistant attorney and chief of the Justice Department’s Civil Division, said in a statement.
US Attorney for the District of Columbia Matthew M. Graves said in a news release that the settlement is “one of the largest procurement fraud settlements in history.”
A spokesperson for Booz Allen said in a statement Friday that the company believes it has acted “legally and responsibly.”
“It decided to settle this civil inquiry for practical business reasons to avoid the delay, uncertainty and expense of protracted litigation,” the spokesperson said. “The company did not want to engage in a years-long court battle with its largest customer, the US government, over that very complex matter.”
A parallel criminal investigation into the allegations by the Justice Department was closed in 2021 without charges. An investigation by the Securities and Exchange Commission is ongoing.
