Siemens Industry, Inc. has reached a settlement to pay more than $1 million in response to allegations of violating the False Claims Act. The settlement arises from a 2011 contract with the Hamtramck Housing Commission in Hamtramck, Michigan.
Siemens was installing energy efficiency improvement measures at two public housing facilities when qui tam whistleblowers reported that the company was overcharging the government.
Inaccurate data lead to higher costs
The settlement resolves allegations that Siemens relied on inaccurate data in its analysis. These data resulted in the United States paying a larger annual subsidy to the Housing Commission than it otherwise would have.
During the contract development, Siemens calculated the amount of energy savings the improvements would deliver. The Housing Commission then submitted records to HUD using data from Siemens’s analysis. However, these data increased the associated costs.
Whistleblowers bring the case to light
Whistleblowers Kevin Kondrat and Jessica Jones brought the claims against Siemens. Under the qui tam provisions of the False Claims Act, private individuals can file lawsuits on behalf of the government in cases of alleged fraud against federal programs.
In successful cases, whistleblowers can receive part of any recovery. In this instance, Kondrat and Jones will receive $179,260.85 from the settlement.
Others stress the importance of accountability
This case highlights the importance of accountability in government contracts. U.S. Attorney Dawn N. Ison emphasized that federal contractors must deal honestly with federal agencies. The False Claims Act is an important tool for holding accountable those who are dishonest in their dealings with government programs.
The settlement underscores the False Claims Amendments Act of 2023, which aims to address technical loopholes undermining the success of the FCA. Whistleblower advocates support these amendments.