MIDDLETOWN-BASED ENERGY INFORMATION COMPANY
AGREES TO PAY $50,000 TO RESOLVE CIVIL FRAUD ALLEGATIONS
David B. Fein, United States Attorney for the District of Connecticut, today announced that NXEGEN, LLC, of Middletown, Conn., has entered into a civil settlement agreement with the Government in which it will pay $50,000 to resolve allegations that it violated the False Claims Act and the common law as the result of invoices NXEGEN submitted to the U.S. Department of Energy for work performed pursuant to a cooperative agreement.
U.S. Attorney Fein explained that NXEGEN provides real-time energy consumption information and energy efficiency solutions for its commercial, industrial, governmental, and institutional customers. In September 2006, the U.S. Department of Energy (“DOE”) awarded a one-year, $1.8 million cooperative agreement to NXEGEN that required 50/50 cost sharing (i.e., $900,000) by the company and the DOE. The cooperative agreement was later amended to extend the performance period from September 1, 2008 through September 30, 2009, and an additional $1.876 million was added to the agreement, with NXEGEN and the DOE each providing an additional $938,000 as their 50/50 cost shares. The total payment by the DOE to NXEGEN pursuant to the entire term of the cooperative agreement was $1.838 million.
It is alleged that certain unallowable items were listed in invoices that NXEGEN submitted to the Government for payment pursuant to the cooperative agreement. For example, the DOE challenged equipment cost charges for the retrofitting of lighting fixtures in buildings equipped with NXEGEN’s energy data monitoring system as beyond the scope of work permitted by the cooperative agreement.
In addition to the monetary settlement, NXEGEN has agreed to create and implement a Government contract compliance program that is administratively acceptable to the DOE. The company will, for example, designate an in-house ethics program director who will provide employees with DOE-approved training regarding federal laws and regulations related to federal funding. NXEGEN also has agreed to establish written policies and procedures that will facilitate the company’s recording and tracking of accounting costs related to federal contracts and financial assistance awards or agreements. The company also has agreed to voluntarily refrain from participating in federal financial assistance opportunities for a nine-month period.
The False Claims Act provides for up to treble damages and penalties of $5,500 to $11,000 per false claim submitted to the Government.
In entering into the settlement, NXEGEN denied any liability, and the agreement indicates that the parties settled this matter to avoid the delay, uncertainty, and expense of litigation.
The investigation of this matter was conducted by the DOE’s Office of the Inspector General, with auditing assistance from the Defense Contract Audit Agency. In addition, the Office of Chief Counsel at the DOE’s National Energy Technology Laboratory was involved in the settlement negotiations and in the review of NXEGEN’s administrative compliance program.
The matter was handled within the U.S. Attorney’s Office by Assistant U.S. Attorney William A. Collier and Auditor Susan N. Spiegel.
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