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Capital Business
Posted at 02:56 PM ET, 06/13/2013

SAIC pays nearly $12M to settle allegations of inflated pricing

The Justice Department said Thursday that McLean-based Science Applications International Corp. has paid $11.75 million to settle allegations it charged inflated prices for a contract in New Mexico.

Under a deal with the New Mexico Institute of Mining and Technology, SAIC providing training for first responders on how to prevent and respond to terrorism attacks, according to the Justice Department. The U.S. government alleged that SAIC’s proposal said the company would employ more expensive personnel than it ended up using.

The lawsuit initially stemmed from a claim made by Richard Priem, SAIC’s former project manager for the training initiative. Under the False Claims Act’s whistleblower provisions, Priem may share in the settlement, but the Justice Department said his cut has not yet been determined.

Priem had worked for SAIC for almost 16 years after more than two decades in the Army, according to his attorney.

The Justice Department noted that settlement resolves claimed based on allegations and there has been no determination of liability. SAIC declined to comment.

Also this week, the U.S. District Court for the Southern District of New York dismissed a lawsuit against the SAIC board of directors in connection with the contractor’s troubled CityTime program.

In the suit, SAIC shareholders had alleged the board “consciously ignored or perpetuated” wrongdoing in the CityTime program, according to court documents. The company settled over CityTime with New York City last year.

The plaintiffs “do not allege any direct path by which information about the CityTime fraud actually reached the board, nor do they allege sufficiently clear and prominent red flags,” the judge wrote.

An SAIC spokeswoman said the company “is obviously very pleased with this ruling.”

By  |  02:56 PM ET, 06/13/2013

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