Press Release

NASA Contractor to Pay $2.5 Million to Resolve False Claims Allegations

By SpaceRef Editor
August 22, 2001
Filed under ,

Sverdrup Technology, Inc., a former technical support contractor at
NASA’s John C. Stennis Space Center, Mississippi, has agreed to pay the
government $2.5 million to resolve allegations of mischarging on a NASA
contract. The allegations stem from mischarging practices at two
laboratories operated by Sverdrup at the Stennis Space Center.

In both instances, NASA alleged that the Tullahoma, Tennessee-based
company mischarged NASA when it had the technical services contract at
the Stennis Space Center in the early to mid 1990’s. On January 24,
2001, United States District Court Judge Walter J. Gex III, Biloxi, MS,
ruled that Sverdrup violated the False Claims Act when it mischarged
NASA overhead labor and material costs as direct costs in one lab,
which allowed the company to increase its profits by disguising the
true extent of its overhead expenses. Judge Gex did not resolve the
issue of damages to NASA at that time. The allegations concerning the
second lab did not go to trial but were resolved in the $2.5 million
settlement.

Kenneth Trawick, a chemist formerly employed by Sverdrup at the Stennis
Space Center, brought the initial allegations in 1994. Under the qui
tam provisions of the False Claims Act, the whistleblower or relator
can file an action on behalf of the United States. Trawick will
receive $150,000 of the $2.5 million settlement.

Special Agents from the NASA Inspector General’s Office of Criminal
Investigations and the Federal Bureau of Investigation conducted the
investigation. United States Department of Justice Commercial
Litigation Branch attorneys Diana Younts, Michael Granston, John
Henebery, and Assistant U.S. Attorney Stephen R. Graben of the Southern
District of Mississippi handled the civil prosecution.

Previous release: 2001-032, 01/31/01, NASA Wins Lawsuit

For more information on this release, please call Samuel Maxey,
Assistant Inspector General for Investigations at (202) 358-2580.

SpaceRef staff editor.