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Government Contractor NortonLifelock Found Liable for Defrauding the GSA, Ordered to Pay $1.7M, in False Claims Act Lawsuit

iStock-1350595566-300x174The technology firm was found to have knowingly included false pricing, rebate, and discount information in disclosures to become a GSA Schedule contractor.

NortonLifeLock (Nasdaq: GEN) has been ordered by a federal court to pay $1.7 million in damages for defrauding the U.S. General Services Administration and the State of California in connection with contracts to provide government agencies with technology services and equipment.

A federal judge found following a bench trial that the company, which is now known as Gen Digital, Inc., violated the False Claims Act by knowingly submitting incorrect commercial sales information to the GSA, which is the federal government’s contracting and procurement agency.

The erroneous data fraudulently induced the GSA to award it Multiple Award Schedule contracts, the court determined.

The fraud was exposed by a NortonLifelock employee who was involved in the management and administration of the company’s GSA MAS schedule contracts. She filed a qui tam lawsuit under the False Claims Act and is eligible for a whistleblower award of 15-30% of the recovery.

The U.S. Department of Justice intervened in and prosecuted the lawsuit to final judgment.

GSA procurement

The GSA helps federal and state agencies procure goods and services cost-effectively. Under its MAS program, the GSA issues long-term, government-wide contracts under which federal, state, and local government agencies can purchase services and products at prices it has pre-negotiated.

Vendors applying to become GSA “Schedule contractors” are required to submit Commercial Sales Practices disclosures with their contract proposals listing truthful commercial pricing, discount, and rebate information. CSP disclosures are intended to ensure that the GSA can negotiate prices that are competitive with the best prices the contractor offers commercial customers.

GSA schedule contracts generally include price reduction clauses triggered by commercial price reductions that occur during the life of the GSA Schedule contract.

False CSP disclosures

U.S. District Judge Rudolph Contreras found that NortonLifelock violated the False Claims Act by knowingly including inaccurate information in its CSP disclosures. Specifically, the company misrepresented the prices, rebates, and discounts it offered “most favored” and “basis of award” commercial customers. As a result, the GSA was fraudulently induced to award it GSA Schedule contracts to supply computer security software.

The company also improperly failed to inform the GSA of subsequent discounts it gave commercial customers, the court found. Those reductions would have triggered price reduction clauses in the GSA Schedule contracts, it determined.

Fraud in federal contracting and the False Claims Act

Combatting fraud by government contractors is a core function of the False Claims Act, which imposes substantial liability on parties that defraud the federal government or its agencies. Under the False Claims Act’s qui tam provisions, private individuals known as relators or whistleblowers are entitled to bring lawsuits against violators on the United States’ behalf and receive 15-30% of the proceeds as a reward.

Call an experienced whistleblower lawyer

If you know of government contactors engaged in fraud, it is important to speak with an experienced whistleblower attorney. Reach out to federal contracting fraud whistleblower attorney Mark A. Strauss for a free consultation. All communications are attorney-client privileged and confidential even if you do not ultimately become a client.

Simply reporting a fraud to a government agency or tip line will not entitle you to a qui tam whistleblower reward. To receive one, you must file a whistleblower lawsuit under the False Claims Act.