Michigan-based company to pay $5M in settlement for allegedly violating False Claims Act in federal subcontract
(CBS DETROIT) - A Michigan-based manufacturing company agreed to pay $5 million after officials say it falsely overstated cost in a subcontract with the U.S. Department of Army.
Federal prosecutors say Merrill Technologoes Group Inc., based in Saginaw, was hired as a subcontractor under an agreement with the U.S. Army's Tank Automotive Command (TACOM) to manufacture upgrades for various armored vehicles.
Officials say Merrill violated the False Claims Act for submitting a proposal to the primary contractor that allegedly overstated cost. Prosecutors say relied on the proposal to negotiate a fixed-price contract with TACOM, resulting in paying overcharges to Merrill and the primary contractor.
"Government contractors must be completely above board when seeking payment under government contracts," said U.S. Attorney Dawn N. Ison in a statement. "This settlement demonstrates our commitment to hold accountable contractors who cause the Government to overpay, and who enrich themselves at taxpayer expense."