Two Companies to Pay Nearly $2.5 Million to Settle Claims Related to Manufacture of Military Container Systems

HOUSTON - Houston-based Advanced Containment Systems Inc. (ACSI) and Boh Environmental LLC,(Boh) have agreed to pay $2,483,000 to settle allegations that Boh sold the Department of Defense (DoD) steel storage containers that were not manufactured according to contractual requirements, announced U.S. Attorney Kenneth Magidson. Boh, the DoD contractor, will pay the United States $783,000, while ACSI, the manufacturer and Boh’s subcontractor, will pay $1.7 million. The claims resolved by this settlement are allegations only, and there has been no determination of liability.

The allegations were brought to the attention of the United States through a whistleblower complaint brought by a former employee of ACSI. The allegations centered on a requirement in the DoD contract that Boh’s products, including expandable wall command center (EWCCs) and field pack-up systems (FPUs), be produced in accordance with International Organization for Standardization (ISO) standards. These standards are intended to provide a framework for businesses to use to continuously improve the quality of their products. Only certain organizations, called registrars, are authorized to review a company’s quality management system and certify that they meet ISO standards.

“Companies that provide supplies to our men and women in uniform must be held to a high standard,” said Magidson. “This settlement indicates our resolve in these matters for those that contract with the United States.”

The FPUs and EWCCs are used by American soldiers throughout the world and in the continental United States. Many were used in the Iraq war. The EWCCs are used as portable command centers, while the FPUs are used to store hardware, weapons and other heavy equipment.

The complaint alleged that in 2008, ACSI and Boh provided the Department of Defense ISO certifications that were not legitimate and that ISO quality standards were not, in fact, met. It also alleged numerous quality deficiencies associated with ACSI’s manufacturing process, such as the use of outdated engineering drawings, water leaks and door sealing problems.

ACSI and Boh later obtained legitimate ISO certification.

The investigation was conducted by the Defense Criminal Investigative Service, U.S. Army Criminal Investigation Command’s Major Procurement Fraud Unit and the Air Force Office of Special Investigations - Office of Procurement Fraud. Assistant U.S. Attorney Michelle Zingaro handled the matter for the Southern District of Texas.