The Department of Justice wants the U.S. Civilian Board of Contract Appeals to lift a stay with implications for a federal False Claims Act lawsuit against the Department of Energy contractor Mission Support Alliance.
The Leidos-led Mission Support Alliance (MSA), which in the past week ended its nearly 12-year run as landlord for DOE’s Hanford Site, opposes the move. The Leidos-Centerra team was replaced this week by another team made up of Leidos, Centerra and Parsons.
In papers filed Jan. 19, MSA urged the Board of Contract Appeals to reject the Department of Justice’s request and leave the stay in place for now. It also said Justice has not properly informed the U.S. District Court in Eastern Washington of the change.
Justice sued MSA and related defendants in February 2019, alleging some $60 million in false claims and kickbacks from 2010 to 2015.
On Wednesday, Judge Rosanna Peterson extended all deadlines in the district court case by six months, which delays the cutoff date for document discovery to Aug. 2 from Feb. 1. The delay means that all parties can review relevant documents before having to complete depositions, according to the judge’s order. The actual trial date is pushed back to May 2023 from November 2022.
Justice’s case centers on MSA’s award of an information technology subcontract to Lockheed Martin Services Inc., which occurred while another Lockheed Martin Corp. subsidiary was the primary owner of MSA. Lockheed’s share of the Hanford contractor was sold to Leidos in 2016.
The parties agree that many of the facts in the fraud case in the lawsuit mirror a dispute before the contract appeals board.
Justice claims DOE was overcharged roughly $63 million because Lockheed Martin reaped double profits – both as chief owner of MSA and also as the owner of the information services subcontractor.
On Dec. 18, Justice filed a motion with the contract appeals board in Washington, D.C., seeking to lift the stay on one key issue in the case there —whether the information technology services should be considered “commercial” under Federal Acquisition Regulations. Commercial services are commonly used by the general public or non-governmental entities.
This is an important distinction because if the Lockheed Martin subcontractor’s information services were deemed “commercial” then it “could charge profit” and the government’s False Claims Act case “collapses,” according to an MSA motion filed last week.
But MSA opposed lifting the stay and appeared to prefer resolving the issue in the court, rather than before the Civilian Board of Contract Appeals. Attorneys for the contractor said the U.S. District Court case is just beginning discovery in the court case, and that the company does not want to duplicate the effort before the board. In addition, certain defendants in the district court, including Lockheed and a former Lockheed executive Frank Armijo are not parties in the contract board case, MSA said.
In a letter to the U.S. District Court Judge Peterson, MSA said Justice apparently has not informed the court of its desire to litigate the commercial question before the contract board, “much less sought [Peterson’s] permission” to do so, as the Contract Disputes Act requires.
