Cybersecurity Fraud Settlement – Federal IT Contractor to Pay $14.75 Million for False Claims

Hill ASC Inc., operating as Hill Associates from Rockville, Maryland, has agreed to pay at least $14.75 million to resolve allegations of violating the False Claims Act in connection with a General Services Administration (GSA) contract for information technology services.

The settlement addresses multiple fraudulent practices spanning from 2018 to 2023 under the GSA’s Multiple Award Schedule (MAS) program.

Contract Violations and Unqualified Personnel

The settlement resolves allegations that Hill systematically billed federal agencies for IT personnel who lacked the required experience and education specified in their contract.

Under the MAS program, which provides government agencies with streamlined procurement processes for commercial goods and services, GSA negotiates contract terms that other federal agencies can utilize for their technology needs.

The company allegedly submitted claims for highly adaptive cybersecurity services despite failing to pass the mandatory technical evaluations required by GSA for such specialized offerings.

These cybersecurity services, along with other unauthorized services, fell outside the scope of Hill’s approved MAS contract; yet, the company continued to bill government customers for these unauthorized capabilities.

Financial Irregularities and Billing Practices

Beyond personnel qualifications, Hill’s violations extended to financial practices that undermined government contracting integrity.

The company charged federal agencies for unapproved fees and failed to provide the mandatory information about prompt payment discounts to which government customers were entitled.

Additionally, Hill included unallowable incentive compensation in cost submissions related to new contract proposals, further inflating government expenses.

The $14.75 million settlement amount was specifically calibrated based on Hill’s financial capacity to pay, with provisions for additional payments should certain financial contingencies occur.

This approach ensures maximum recovery while maintaining the company’s operational viability.

Multi-Agency Investigation and Enforcement

“Information technology contractors are expected to charge the government appropriately for their services,” stated Assistant Attorney General Brett A. Shumate of the Justice Department’s Civil Division.

“We will continue to pursue cyber fraud and hold accountable those companies that knowingly fail to meet contractual obligations to the American taxpayers.”

The investigation represented a coordinated effort among multiple federal oversight bodies, including the Justice Department’s Civil Division, Commercial Litigation Branch, Fraud Section, the GSA’s Office of Inspector General, the Treasury Department’s Office of Inspector General, and the Treasury Inspector General for Tax Administration (TIGTA).

GSA Deputy Inspector General Robert C. Erickson emphasized that “Federal agencies should get what they have paid for from GSA contractors, nothing less.”

At the same time, Treasury Deputy Inspector General Loren Sciurba noted that such violations can create “significant adverse effects to vital security concerns.”

The settlement resolves allegations only, without a formal determination of liability being established.