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Justice News

Department of Justice
U.S. Attorney’s Office
Middle District of Pennsylvania

FOR IMMEDIATE RELEASE
Thursday, December 4, 2014

DHS Technologies Agrees To Pay $1.9 Million To Settle Federal False Claims Act Allegations

The United States Attorney’s Office for the Middle District of Pennsylvania announced today that DHS Technologies LLC and its subsidiary, DHS Systems LLC (collectively “DHS”), have agreed to pay $1.9 million, plus interest, to the United States to resolve allegations that DHS violated the False Claims Act by failing to disclose to the General Services Administration (“GSA”) that it offered greater discounts to a private company for the same items during the negotiation for the re-award of a government contract.

According to United States Attorney Peter Smith, this settlement agreement filed with the U.S. District Court today in Scranton resolves allegations that in 2007 DHS failed to inform the GSA during contract re-award negotiations, as it was required to do, that products offered for sale to the United States and its agencies were offered for sale at lower prices to a commercial company.  This resulted in federal agencies paying more for the products from 2007 through 2013 than they would have had the GSA known about the lower prices.

DHS has its headquarters in Orangeburg, NY.  It is a provider of mobile shelters and trailer-mounted support systems for military, medical, government and civilian organizations around the world.  During the relevant time period, DHS conducted business in northeastern Pennsylvania, including with the Tobyhanna Army Depot.          

“Companies doing business with the United States must be diligent in making sure American taxpayers are getting the best deal,” said GSA Deputy Inspector General Robert C. Erickson.

“Companies doing business with the U.S. government should do their part to ensure that the military is guaranteed a fair price for the goods and services it needs to support our military men and women,” said Frank Robey, the director of the U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit.  “Those companies who abuse their contracts will find our special agents ready to hold the companies accountable for their illegal activities.”

The settlement arose from a lawsuit filed in the United States District Court for the Middle District of Pennsylvania in 2011 by a whistleblower under the qui tam provisions of the False Claims Act.  Under that law, private citizens can bring suit on behalf of the government for false claims and share in any recovery.  The False Claims Act further provides that the United States may intervene in the suit as it did in this case.

The case was investigated by the Justice Department’s Civil Division, the United States Attorney’s Office for the Middle District of Pennsylvania, the General Services Administration Office of Inspector General, the Army Criminal Investigation Command, the Defense Criminal Investigation Service, and the Defense Contract Audit Agency.  The case was litigated by Assistant United States Attorney Timothy S. Judge of the United States Attorney’s Office for the Middle District of Pennsylvania.

The case is United States ex rel. McKinney v. DHS Technologies, LLC et al., Civ. No. 3:CV-11-146 (M.D.Pa.)  The claims resolved by the settlement are allegations only; there has been no determination of liability.  Other claims by the private plaintiff in the original lawsuit were not involved in the settlement and remain in the ongoing case.

Updated April 16, 2015