Insitu to pay $25 million to settle allegations it submitted false cost and pricing data

Insitu has agreed to pay $25 million to settle allegations it knowingly submitted materially false cost and pricing data for U.S. Special Operations Command and Navy contracts to supply and operate drones, the Justice Department said today.

DOJ said that from 2009 to 2017 Insitu entered into five contracts with the Navy and two contracts with SOCOM for the supply and operation of unmanned aerial vehicles.

"The settlement resolves allegations that Insitu knowingly induced the government to award it these seven, noncompetitively bid contracts at inflated prices by proposing cost and pricing data for new parts and materials in support of its contract proposal while planning to and in fact using less expensive recycled, refurbished, reconditioned, and/or reconfigured parts to perform the contracts," DOJ said.

The department said a former Insitu executive initially filed a whistleblower lawsuit in federal court. The government opted to intervene and the executive, D.R. O'Hara, is entitled to about $4.6 million of the recovered funds.

Under the terms of the settlement, the claims remain allegations and there was no determination of liability.

In a statement, Insitu said the agreement "resolves a complex case."

"We cooperated fully with the government during the course of its investigation and, as reflected in the settlement, maintain that our disclosures to the government at the time satisfied all requirements, as they do today," the company added.