Federal IT Contractor Fined $14.75M for Misrepresenting Cybersecurity Services

Hill ASC Inc., operating as Hill Associates, based in Rockville, Maryland, has agreed to pay a minimum of $14.75 million to settle claims that it violated the False Claims Act in connection with federal information technology contracts managed through the General Services Administration’s (GSA) Multiple Award Schedule (MAS) program.

Announced by the U.S. Department of Justice, this significant settlement addresses allegations that from 2018 to 2023, Hill Associates submitted invoices for IT personnel who did not possess the academic credentials or relevant experience stipulated under its MAS contract.

Settlement Resolves Allegations

According to the Report, the MAS program is designed to streamline federal procurement of commercial IT goods and services, with GSA negotiating contract terms that participating agencies rely upon.

The allegations assert that Hill Associates not only misrepresented the qualifications of billed personnel but also claimed payment for highly adaptive cybersecurity services that were outside the contract’s approved scope.

The company had not undergone or passed the mandatory technical evaluation required by GSA for vendors offering such advanced cybersecurity services, yet proceeded to submit claims for these offerings as well as unrelated services not covered by the MAS contract.

Further, investigators found that Hill Associates improperly charged federal agencies unapproved fees, failed to comply with GSA requirements to disclose available prompt payment discounts, and included incentive compensation disallowed under federal cost submission rules in proposals for new contract work.

The enforcement action emphasizes the government’s stance that IT services vendors must adhere strictly to contractual obligations and pricing policies, particularly in contexts where cybersecurity and public sector critical infrastructure are at risk.

Procurement Integrity Violations

The $14.75 million penalty, which may increase depending on the company’s future financial circumstances, was calculated with consideration to Hill Associates’ ability to pay.

The settlement, while not an admission of liability by Hill Associates, closes the government’s inquiry into the company’s conduct on federal contracts within the scope of the investigation.

Justice Department officials highlighted the importance of accurate billing and contract performance in federal IT procurements.

“Information technology contractors are expected to charge the government appropriately for their services,” stated Brett A. Shumate, Assistant Attorney General for the DOJ 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 GSA’s Office of Inspector General underscored the impact of such violations on the integrity of the procurement process and national security.

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

Additionally, the Treasury Department’s Inspector General’s offices, including the Treasury Inspector General for Tax Administration (TIGTA), emphasized their ongoing commitment to exposing and preventing procurement fraud and related misconduct among government contractors.

“We remain steadfast in our mission to expose and hold accountable those who attempt to defraud the IRS,” said Acting Special Agent in Charge Jessica Cipolla of TIGTA’s Gulf States Field Division.

The matter involved a coordinated investigation between the Justice Department’s Civil Division specifically the Commercial Litigation Branch, Fraud Section GSA’s Office of Inspector General, the Treasury’s Office of Inspector General, and TIGTA. Senior Trial Counsel Christopher Terranova led the DOJ’s prosecution of the case.

This settlement serves as a high-profile reminder of the federal government’s renewed focus on rooting out contract fraud, particularly in sensitive areas such as IT and cybersecurity, and reinforcing strict compliance with contract specifications across the federal procurement landscape.

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Mandvi
Mandvi
Mandvi is a Security Reporter covering data breaches, malware, cyberattacks, data leaks, and more at Cyber Press.

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