SAIC settles claims case

Officials at Science Applications International Corp. have agreed to pay $2.5 million to settle a false claims case related to work at Kelly Air Force Base in San Antonio, Texas. Justice Department officials announced the settlement agreement April 27.

The case was originally filed in January 2002 by Michael Dwight Woodlee, an SAIC project manager involved in the Kelly contract, who claimed that company officials were padding their cost estimates to pocket more profit. The Justice Department joined the case in August 2004, following audits by the Air Force of Special Investigations, the Defense Contract Audit Agency and the U.S. Attorney's Office for the Western District of Texas.

"This is a victory in the ongoing battle against contractor fraud," said U.S. Attorney Johnny Sutton, of the Western District of Texas, in a written statement. "Our office will continue to investigate complaints of fraud on the government and will aggressively work to recover illegal gains, especially when taxpayer-funded Defense Department appropriations are so vital to our national security."

Woodlee will receive $500,000 of the settlement under a provision of the False Claims Act that allows persons filing successful cases alleging fraud against the government to share in any resulting recovery. The Justice Department keeps 3 percent of the remainder, and the rest goes to the Air Force for restitution, said a Justice Department spokeswoman.

SAIC officials are "pleased that this matter has been resolved," said Jared Adams, SAIC spokesman. "The Air Force is an invaluable customer, and it was important that this matter be put behind us, so that we can focus on the critical national defense work at hand."

However, he added, "It is important for everyone to understand that this case turned on complex legal issues which were hotly contested. We are pleased to see that the broader industry has now joined in the debate, and we believe such public debate will benefit both government and industry."

The company denies any wrongdoing.