March 14, 2023. The United States Department of Justice settled a qui tam case against patient monitoring equipment distributor Spacelabs Healthcare for failure to follow the Price Reductions Clause in two government contracts. Under the terms of the settlement, the medical equipment company paid $2.5 million. There were two Spacelabs employees who came forward and reported this fraud, a former government business specialist and an accounts manager. For reporting government contracting fraud, the whistleblowers will receive $437,500 or approximately 17.5% of the settlement.
According to the allegations, Spacelabs’ contracts with the VA and Defense Logistics Agency contained clauses requiring the patient monitoring equipment company to “maintain during the contract period the negotiated price/discount relationship […] between the eligible ordering activities and the offeror’s customer or category of customers on which the contract award was predicated.” This means that the contractor cannot charge the government more than it does a similar category of customers. The whistleblowers reported that Spacelabs was charging the government more than another customer in two contracts during a five-year period.
The U.S. Attorney for the District of Columbia said about the case, “Federal contractors are expected to deal honestly with federal agencies and faithfully abide by the terms of their government contracts.” When government contractors overcharge the government for equipment and services, taxpayers foot the bill. Whistleblowers help make sure taxpayers’ dollars go to the projects the government contractors are hired to complete.
If you would like to report government contracts or procurement fraud, you can contact attorneys at Tycko & Zavareei LLP. Eva Gunasekera and Renée Brooker are former officials of the United States Department of Justice and prosecuted whistleblower cases under the False Claims Act. Renée served as Assistant Director at the United States Department of Justice, the office that supervises False Claims Act cases in all 94 United States District Courts. Eva was the Senior Counsel for Health Care Fraud. Eva and Renée now represent whistleblowers. For a free consultation, you can contact Renée at [email protected] (tel.: 202-417-3664) or contact Eva Gunasekera at [email protected]. You can also go to Tycko & Zavareei LLP’s website for whistleblowers to learn more at https://www.fraudfighters.net/.