Fraud team efforts result in millions repaid to AF

Air Force Procurement Fraud organizational patch

Air Force Procurement Fraud organizational patch

QUANTICO, Va. -- CH2M Hill Incorporated, Englewood, Colo., voluntarily repaid $10,567,760 directly to the Air Force for overpayment on Air Force contracts.

Air Force Office of Special Investigations Procurement Fraud Detachment 2, Operating Location B, Buckley Air Force Base, Colo., initiated an investigation of potential false claims submitted on two Air Force contracts on July 9, 2015. The primary OSI case agent was Special Agent Terrell Harris while the secondary OSI case agent was SA Dana Grant.

As the lead investigative agency, in conjunction with the Defense Criminal Investigative Service and the Defense Contract Audit Agency, PF Det. 2, OL-B focused their investigative efforts to determine if CH2M Hill violated criminal or civil false claims statutes through their billing practices.

Originally, the Air Force awarded CH2M Hill Inc., two architectural and engineering contracts supporting construction efforts at multiple Air Force installations across the continental United States.

In 2014, DCAA conducted an audit of CH2M Hill’s fiscal year 2008 billings on these contracts and confirmed at least eight engineering employees did not meet labor qualification requirements. CH2M Hill also conducted an internal audit and discovered more than 300 instances of unqualified labor billed against the two contracts.

In April 2015, CH2M Hill notified the Department of Defense through a mandatory contractor disclosure that in 2010, an external review of the company's billing system identified weaknesses in validating their employee's qualification requirements when billing the Air Force for work performed.

Throughout the investigation, agents and auditors cooperatively reviewed more than 17,000 documents and associated audits to confirm the Air Force overpaid $8.3M.

As a direct result of the investigative team's efforts, CH2M Hill voluntarily repaid $10,567,760 directly to the U.S. Air Force. The payment included the $8.3 million in overpayments, plus $2.2 million in interest.

The U.S. Attorney's Office for the Western District of Washington remains engaged on this investigation despite the payment because of potential violations of the Mandatory Disclosure Rule. This violation potentially occurred when CH2M Hill failed to notify the government of the labor overbillings in 2010 when the external audit raised the accounting vulnerabilities.