Tech Consultant to Feds Must Face Fraud Claims

WASHINGTON (CN) - Science Applications International Corp. must face claims that it submitted false payment claims to the Nuclear Regulatory Commission, a federal judge ruled.

The U.S. government sued SAIC under the False Claims Act nine years ago, claiming that the company's organizational conflicts of interest (OCI) led the company to submit false invoices for the technical assistance it provided in the Nuclear Regulatory Commission's (NRC) efforts to create scientific standards on recycling and reusing radioactive materials.

"The government contends 'that SAIC breached its OCI obligations under the 1992 and 1999 contracts by engaging in relationships with organizations that created an appearance of bias in the technical assistance and support it provided the NRC,'" Chief U.S. District Judge Richard Roberts summarized.

Though a jury found SAIC liable for submitting false claims and breach of contract, the D.C. Circuit vacated the judgment and remanded for further proceedings.

Both sides moved for summary judgment but, Judge Roberts refused Monday, citing "genuine disputes of material fact."

SAIC's argument hinges on whether it knowingly broke the law by consulting with British Nuclear Fuels in 1992 and Bechtel Jacobs Corporation in 1999.

The government claims that SAIC's "relationship with British Nuclear created a potential conflict because the project involved the recycling and release of radioactive materials that would become subject to NRC regulation after leaving the DOE facility and entering into interstate commerce," according to the D.C. Circuit's ruling, which Roberts quoted in his decision.

The government also contends that SAIC's work for Bechtel Jacobs "closely overlapped with the company's work for the NRC."

SAIC's business relationships with Alaron Corp., the Association of Radioactive Metal Recyclers, and Plasma Hearth Process also came into question, the ruling states.

"There is sufficient evidence for a reasonable jury to find that SAIC knew that its claims and statements were false, but also that SAIC's challenged business relationships did not create potential or actual OCIs," Roberts wrote. "Because SAIC has not shown that the amount of FCA damages under the 1992 contract is the 'same issue' as the breach of contract damages, the government is not precluded from arguing that it is entitled to FCA damages under the 1992 contract beyond $78."

Finding that the government had provided enough evidence to show a dispute under the 1999 contract, the judge dismissed all motions for summary judgment.

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