PAE to pay $5 million settlement

By Marjorie Censer / September 14, 2017 at 2:03 PM

Contractor PAE will pay $5 million to resolve allegations "it knowingly failed to follow vetting requirements for personnel working in Afghanistan under a State Department contract for labor services," the Justice Department said this week.

In 2007, DOJ said, PAE received a State Department task order to provide training and mentoring personnel in Afghanistan. The company was required to conduct extensive background checks on U.S. personnel in "high-risk or armed positions" and to submit the names of local, national and third-party national employees working on the task order, the Justice Department said.

"According to the government's evidence, PAE was aware of these contractual requirements but did not comply with them for extended periods," the Justice Department alleged. "The United States asserts that invoices PAE submitted to the State Department for the labor services of improperly vetted personnel were false."

The settlement resolves a whistleblower lawsuit filed by former PAE manager Robert Palombo; he will receive $875,000 of the settlement, according to DOJ. Under the settlement, there has been no determination of liability.

In a statement, PAE disputed the government's allegations. The contractor said its actions "were fully consistent with the contract requirements and that no false claims were submitted to the government.

"The invoices submitted to the government were based on a recruiting process that was proposed to and accepted by the government, and through which successful candidates were identified and deployed," the company continued. "The invoices specifically identified the names of those employees for whom the lawsuit alleges that requisite notice was not made. The employees whose background investigations were allegedly inadequate were not involved in any security incidents or injuries. The services called for under the contract were provided in full."

However, PAE said it has opted to resolve the lawsuit for $5 million "because it makes sense to do so as a business decision, to avoid the distraction that this four-year-old dispute has imposed on current operations and the cost of future litigation."

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