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Justice News

Department of Justice
U.S. Attorney’s Office
District of Colorado

FOR IMMEDIATE RELEASE
Monday, November 17, 2014

ESRI Agrees To Pay $550,000 To Settle Allegations Of Government Contract Fraud

DENVER -- Esri, Inc., a geographic information systems (GIS) software development company based in Redlands, California, has paid $550,000 to settle allegations that it violated the False Claims Act by overbilling the Bureau of Land Management’s (BLM) National Operations Center (NOC) during the course of multi-year GIS software development projects called the National Integration Land System and GeoCommunicator. 

The NOC provides internal operational and technical program support to BLM offices across the country.  It contracted with Esri for the development of mapping system software to aid in achieving BLM’s land management goals. 

Government contractors are bound by the rules set forth in the Federal Acquisition Regulations (FAR) and are expected to know and comply with those provisions.  During the course of the GIS projects, Esri and BLM entered into Time and Materials (T&M) type contracts.  The FAR regulations for T&M contracts prohibit contractors from adding certain types of profit and fees to billed items such as travel and the cost of project subcontractors.  The United States alleges that Esri added prohibited profit and fees to invoices for payment in T&M contracts, without BLM’s knowledge or approval.  Because Esri did not disclose these billing practices to BLM, the federal agency paid Esri hundreds of thousands of dollars to which it was not entitled.  Esri also improperly billed BLM for Esri employees to attend conferences unrelated to the GIS projects, and improperly billed BLM for computer services such as servers and virtual private network accounts for which BLM did not contract.   

“Protecting taxpayer dollars is a critical mission of the United States Attorney’s Office,”  said U.S. Attorney John Walsh.  “When a government contractor inflates its bills to the United States, we will take action both to recover the overbilled amount, and also to hold the contractor responsible for the misconduct.”

“This settlement is another example of the successful results of collaboration between BLM, Office of Inspector General and the U.S. Attorney’s Office to fight fraud, waste and mismanagement,” said Mary Kendall, Deputy Inspector General, Department of the Interior.

The claims settled by this agreement are allegations only.  There has been no determination of liability.

This matter was investigated by the Department of the Interior’s Office of Inspector General.  It was handled by Assistant U.S. Attorneys Amanda Rocque and Zeyen Wu. 


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Updated June 22, 2015