/>i12 December 2024. Government contractors just received a stark reminder of the power of whistleblowers who report federal contracting violations. Gen Digital Inc. (previously Symantec Corp.) has agreed to pay $55.1 million to settle claims related to knowing overcharges made under a General Services Administration (GSA) contract. The reward for the whistleblower-relator who brought this government contracts fraud qui tam lawsuit is yet to be determined, but typically whistleblowers will share in 15-25% of the government’s recovery.
The Case in Brief
The settlement arose after the government prevailed in a False Claims Act lawsuit, asserting that Symantec knowingly made false statements during GSA contract negotiations and continuously violated contractual obligations.
The U.S. Attorney for the District of Columbia said about the trial, “Because these schemes steal taxpayer dollars, the United States Attorney’s Office for the District of Columbia will be steadfast in its efforts to bring fraudsters to justice no matter the complexity of the matter, pursuing them through trial, if necessary, to secure a just outcome.”
Key Case Details:
After a 2022 four-week bench trial, the court found Symantec guilty of misrepresentation and non-compliance, which led to the inflated pricing under the GSA contract. The misrepresentations tainted the contract from initial negotiations in 2006 through the conclusion of its performance in 2012. According to the court, Symantec falsely certified that its commercial sales data was “current, accurate, and complete” during contract negotiations and renewals. The misrepresentation led the GSA to approve higher prices than it would have if truthful disclosures had been made. Symantec also repeatedly breached the Price Reduction Clause, a standard provision in Multiple Award Schedule Contracts. This clause mandates that contractors ensure consistent pricing between the GSA and specified customers or customer categories. By failing to comply, Symantec denied the U.S. government the discounts it was entitled to receive.
Symantec, now operating as Gen Digital, paid $55.1 million: $16.1 million in damages, $36.8 million in civil penalties, and additional post-judgment interest and costs. The whistleblower was Lori Morsell, a former Symantec employee responsible for administering the contract.
Government Contracts and the False Claims Act
The False Claims Act requires contractors to provide complete and transparent information during contract negotiations. Misrepresentations—whether intentional or accidental—can result in significant legal and financial repercussions. The Price Reduction Clause is an essential term in many federal contracts, ensuring fair pricing for the government. Contractors must proactively monitor and align their GSA pricing with their commercial sales practices to avoid costly disputes. Under the qui tam provisions of the False Claims Act, whistleblowers are empowered to report intentional misrepresentations in government contracts and earn a portion of the government’s recovery.
The Gen Digital (formerly Symantec) False Claims Act settlement serves as a wake-up call for employees of government contractors handling GSA Contracts. Whistleblowers with insider knowledge can keep government contracting fraud in check by filing a qui tam lawsuit. The False Claims Act includes provisions that protect whistleblowers from retaliation for reporting fraud against the government. These protections ensure that individuals can pursue legal remedies if they face adverse actions such as termination, demotion, or harassment for coming forward.
