FEMA receives largest U.S. civil settlement in Md.

April 28, 1994|By Marcia Myers | Marcia Myers,Sun Staff Writer

In the largest civil settlement ever reached by federal prosecutors in Maryland, a major computer services company has agreed to pay $3.2 million to resolve claims that it falsely billed the Federal Emergency Management Agency.

The settlement, announced yesterday, resolves an investigation into Computer Sciences Corp.'s billing for services provided to FEMA's National Flood Insurance Program.

Computer Sciences is an international company based in El Segundo, Calif. But the investigation targeted billing practices out of the company's Lanham office, where its Health and Administrative Services Division employs about 200 people.

In 1992, FEMA staff uncovered some billing discrepancies that triggered a two-year investigation to track computer processing done by Computer Sciences, said Assistant U.S. Attorney Roann Nichols.

Computer Sciences overbilled FEMA from October 1988 to September 1992 by charging for more hours of computer time than had actually been used, according to prosecutors, who would not disclose the amount overbilled. The work was part of a five-year, $94 million contract awarded in June 1988.

Had the government proceeded with a civil suit and won, the company could have faced treble damages plus fines of up to $10,000 for each claim of presenting false bills.

In a statement released yesterday, Computer Sciences said it had done nothing wrong. "We deny all of the government's claims and assert that our billings were in accordance with the contract," said company Vice President Bruce Plowman.

The company also said it had charged too little for other services, prosecutors said. To resolve some disputed billings between 1992 and 1993, FEMA has agreed to pay the company $286,166. About half of Computer Sciences $2.6 billion in annual revenue comes from federal contracts. In fact, FEMA awarded the company a five-year, $48.6 million contract when the work was rebid last year.

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