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APRIL 6, 2006
FOR IMMEDIATE RELEASE
ROCKVILLE DEFENSE CONTRACTOR AGREES TO PAY OVER $1.6 MILLION
TO SETTLE OVERCHARGE CLAIM
Baltimore, Maryland - AEPTEC Microsystems, Inc., headquartered in Rockville and doing business as 3e Technologies, has agreed to pay $1,662,500 to settle potential claims against the company under the False Claims Act that it overcharged the Department of the Navy in four contracts for shipboard automation technology, announced United States Attorney for the District of Maryland Rod J. Rosenstein.
The settlement resulted from an investigation by the Defense Criminal Investigative Service in conjunction with the United States Attorney’s Office for Maryland into 3e Technologies’ performance under four Navy contracts. All four of the contracts involved developing and installing systems on Navy ships that allow for the wireless transfer of information on board and to facilities on shore. Three of the contracts involved the installation of wireless sensors to collect data about wear and tear on equipment aboard ships, to assist the Navy in making the transition from scheduled maintenance to condition based maintenance. The fourth contract called for the automation of shipboard food services, including development of a wireless system to monitor food inventories aboard ships.
The settlement agreement resolved claims that 3e Technologies submitted false claims to the Navy for work performed under the contracts by shifting labor hours from fixed fee contracts for commercial purchasers and other government entities to the Navy’s cost-plus contracts. The 3e contracts with the Navy were all cost plus fixed fee contracts. Under cost plus contracts, a contractor receives direct reimbursement for all costs, including labor costs. Under fixed price contracts, the contractor agrees to a total price regardless of actual cost. By shifting costs from fixed price to cost plus contracts, a contractor may considerably increase the amount of money it receives for its work.
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, 3e 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 Jamie M. Bennett and the Office of the Defense Criminal Investigative Service for their work on the investigation and settlement.
This page last modified—April 6, 2006