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Iraq: SAIC Pays DOD Settlement

by Rachel SamsBaltimore Business Journal
March 25th, 2004

Defense contractor Science Applications International Corp. has agreed to pay $484,500 to settle allegations it violated the False Claims Act when designing a computer system program for the U.S. Department of Defense.

California-based SAIC, which has offices throughout Maryland, received a contract from the Department of Defense to design and develop the Defense Occupational and Environmental Health Readiness System. SAIC was to create a unified system that would include each Department of Defense employee's occupational health data.

The contract's initial phase required SAIC to make weekly and monthly status reports on its progress with the industrial hygiene component of the project. SAIC also had to participate in a system that tracks defense contractors' progress on projects and pays a predetermined amount for each component they finish.
The federal government alleged that SAIC repeatedly misrepresented its progress on the project. An independent audit by the Department of Defense after SAIC completed its work showed that when SAIC was claiming the project was 96 percent complete, it was only half finished, the government said.

The government also alleged it overpaid for SAIC's services and that SAIC's actions delayed the government's implementation of the system.

SAIC has denied the allegations, the government said.

The investigation was conducted by the Department of Defense, the Army Criminal Investigative Division, the Defense Criminal Investigative Services, and the U.S. Attorney's office in the District of Maryland. Assistant U.S. Attorney Thomas Corcoran and Auditor Mary Hammond handled the civil case.

SAIC was in the news in Maryland last fall for its role in investigating Diebold Election Systems' touch-screen voting machines. Maryland has spent millions to order the machines, and after university researchers identified potential flaws in Diebold's system, the state hired SAIC to evaluate the Diebold machines. SAIC said the Diebold machines were at "high risk of compromise."

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