FOR FURTHER INFORMATION CONTACT
AUSA VICKIE E. LEDUC at 410-209-4885
DECEMBER 28, 2005
FOR IMMEDIATE RELEASE
USAID VENDOR AGREES TO PAY $1.2 MILLION TO SETTLE
Baltimore, Maryland - United States Attorney for the District of Maryland Rod J. Rosenstein announced today that Bethesda-based Development Alternatives, Inc. (DAI) has agreed to pay $1.2 million to settle potential claims against the company under the False Claims Act that it overcharged the U.S. Agency for International Development (USAID) in three contracts for overseas economic development work performed on USAID’s behalf.
The settlement resulted from an investigation by the USAID-Office of Inspector General in conjunction with the United State’s Attorney’s Office for Maryland into DAI’s performance under three USAID contracts in which DAI used the services of a wholly owned subsidiary, MAS International, Inc. (MAS), as a subcontractor. Two of the contracts, signed in 1996 and 1997, involved implementation of economic assistance programs in post-war Bosnia-Herzegovina. The third contract, signed in 1995, involved the implementation of a program to encourage financial institutions to increase the flow of credit to micro and small businesses in developing counties.
DAI created MAS in 1995 to specialize in banking and business training in developing countries. MAS performed banking and financial training services as a subcontractor to DAI under each of the three contracts. The training included the provision and use of training materials that were to be billed to USAID at DAI’s cost in obtaining the materials. Based on its investigation, the Government contended that DAI charged USAID for the training materials without adequate cost justification, resulting in an overpayment to DAI of $438,200. In addition, the Government contended that in one of the three contracts, DAI charged USAID its agreed profit rate, plus the profit charged by MAS to DAI, resulting in an overpayment to DAI of $79,532, making the total overpayments $517,732. DAI no longer owns MAS.
Enacted during the Civil War, the False Claims Act is the Government’s primary civil tool to combat fraud and abuse in federal programs and procurement. The Act allows the Government to recover triple the amount of its actual damages, plus a civil penalty of $6,000 to $11,000 for each claim. Pursuant to the agreement, DAI does not admit that it violated the False Claims Act, nor does the Government concede that its claims are not well founded.
United States Attorney Rosenstein commended Assistant United States Attorney Michael A. DiPietro and the Office of the Inspector General for the U.S. Agency for International Development for their work on the investigation and settlement.
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