Booz Allen to pay $377.5 million to settle government billing case

The US Department of Justice said Friday that consulting firm Booz Allen Hamilton has agreed to pay $377.5 million to settle a federal lawsuit that accused it of falsely billing the US government.

The settlement resolves allegations that, between 2011 and 2021, Booz Allen improperly charged the government indirect costs that it should have paid under its commercial and international contracts, the Justice Department said in a news release. The government alleged that the company “reimbursed the government for the costs of business activities that provided no benefit to the United States.”

Indirect costs for a consulting firm can include such expenses as equipment, marketing, and office space.

Booz Allen, based in McLean, Virginia, has lucrative defense and intelligence contracts with the federal government. Investigators began reviewing the company’s billing practices in 2016.

“Government contractors must detour when billing the government for costs under government contracts,” Brian M. Boynton, senior deputy assistant attorney general and chief of the Department of Justice’s civil division, said in a statement.

Matthew M. Graves, the US Attorney for the District of Columbia, said in the press release that the settlement was “one of the largest procurement fraud settlements in history.”

A Booz Allen spokeswoman said in a statement Friday that the company believes it acted “lawfully and responsibly.”

“I decided to settle this civil investigation on practical commercial grounds to avoid delay, uncertainty and the expense of lengthy litigation,” the spokeswoman said. “The company did not want to become embroiled in what was likely a years-long court battle with its largest customer, the US government, over a very complex matter.”

A parallel criminal investigation into the Justice Department’s allegations closed in 2021 without charges being filed. The Securities and Exchange Commission is still an ongoing investigation.