FOR IMMEDIATE RELEASE                                	     CIV
MONDAY, AUGUST 26, 1996                                     (202) 616-2765
							TDD (202) 514-1888

CLEVELAND FIRM PAYS U.S. $4 MILLION TO SETTLE CONTRACT DISPUTE

WASHINGTON, D.C. -- A Cleveland, Ohio, architectural and engineering firm will pay the United States $4 million to resolve allegations it inflated contracts for designing government facilities to cover the costs of its employee pension plan, the Department of Justice announced today.

Assistant Attorney General Frank W. Hunger of the Civil Division said the settlement agreement resolves civil liability claims against The Austin Company under the False Claims Act, 31 U.S.C. § 3729.

According to the Department, Austin added 8 percent of direct labor costs to government contracts to cover Austin's contributions to its employee benefit plan from 1980 through 1987, although its actual cost was approximately 5 to 6 percent. Austin continued the practice from 1987 through 1990 even though Austin did not make any contributions to the plan because it was changed to one that was fully funded.

Today's settlement resolves allegations in United States ex rel. Tadlock et al. v. The Austin Company, CV-95-3565 (C.D. Cal.), a suit brought under the whistleblower provisions of the False Claims Act. In their suit, the whistleblowers alleged that Austin submitted inflated proposals and invoices on various government contracts for the pension contributions. Pursuant to the False Claims Act, the whistleblowers will receive $800,000 as their share of the $4 million settlement.

"This settlement illustrates the Department of Justice's determination to recover funds inappropriately proposed or billed to government contracts," said Hunger.

From 1980 through 1990, The Austin Company held more than 40 federal contracts involving hundreds of millions of dollars. Today's settlement involved a portion of each of those contracts since Austin subcontracted out most of the construction work under the contracts.

Some of the types of buildings Austin designed for the United States included post office facilities, Army supply depots and Air Force facilities.

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