News and Press Releases

Alaska Native Company Billed for Much Heavier Steel than used in McChord Fence

May 10, 2010

The U.S. Department of Defense and U.S. Department of Justice reached a civil settlement today with Chugach Management Services, Inc. over alleged over billing on four different fencing projects at McChord Air Force Base outside Tacoma, Washington. Under the terms of the settlement, Chugach Management Services, Inc., an Alaska Native corporation based in Anchorage, will pay the Government $822,000 to settle alleged violations of the False Claims Act and other common law claims. The company is not admitting any wrongdoing in the settlement.

According to the records on file with the U.S. Air Force, Chugach Management Services, Inc. was awarded a contract to build four different security barrier fences at McChord. In each of the four projects the company allegedly fraudulently billed the government for the type of steel that would be used in a skyscraper. The actual steel that was used in the fence was far lighter and cheaper. The payment made by Chugach Management Services, Inc. to the U.S. Military is double the amount of the estimated overcharges for which the company allegedly over billed the Government.

“Chugach's manipulation of contract terms for the installation of security barriers is an example of a contractor's attempts to commit fraud in order to inflate profits,” said Jennifer Wallace, Resident Agent in Charge, U.S. Department of Defense, Inspector General, Defense Criminal Investigative Service. “Such acts will not be tolerated and will be fully investigated and referred for prosecution by DCIS and our law enforcement counterparts.”

The contracting was investigated by the Department of Defense, Office of Inspector General, Defense Criminal Investigation Service. The settlement was negotiated by Assistant United States Attorneys Peter Winn and Kayla Stahman.

A photograph of the two different types of steel is available by contacting Emily Langlie, Public Affairs Officer for the United States Attorney’s Office, at (206) 553-4110 or Emily.Langlie@USDOJ.Gov.

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