Lockheed Martin Sub-Division Sandia to Pay $4.7 Million to Settle False Claims Act Allegations

Earlier this month, government contractor Sandia National Laboratories agreed to pay $4.7 million amid allegations that it improperly and intentionally misallocated federal funding in order to pay for lobbying efforts to Congress regarding contracts for nuclear research and development.

Much like healthcare fraud, government contracting fraud is becoming a growing problem in need of sharp-witted whistleblowers to help put a stop to the financial hemorrhaging. Over the past several years, the Department of Justice has nabbed several contractors for engaging in dishonest and intentionally fraudulent misconduct with contract funds. In some cases, contractors were caught violating labor requirements, while others have been accused of double billing for wages or parts.

In today’s case, Lockheed Martin’s subdivision, known as Sandia National Laboratories, put to rest contentions that it took government contract money and used it to advance lobbying efforts – an obvious and clear violation of the regulations pertaining to government contracts.

The misconduct was first reported by the Department of Energy following an investigation into the company’s financial records.

Details of the alleged misconduct

Sandia is a wholly-owned subsidiary of Lockheed Martin, one of the top defense contractors in the United States. Based in New Mexico, Sandia focuses a majority of its work on nuclear energy and research, requiring a substantial amount of federal funding. Accordingly, it maintains lucrative contracts, including a Management and Operating (M&O) Contract with the Department of Energy’s (DOE’s) National Nuclear Security Administration (NNSA) to operate its facilities.

In a somewhat cyclical pattern, Sandia is alleged to have used some of the contract money offered by the government to advance its lobbying efforts to Congress in order to win the contract again once it came time for renewal. According to a statement by the Department of Justice, “The money allocated by Congress for the Sandia National Laboratories is designed to fund the important mission carried out by our national laboratories, not to lobby Congress for more funding…. This resolution demonstrates that the Justice Department will work to ensure that public funds are used for the important purposes for which they are intended.”

According to the allegations, Sandia paid several million dollars to a consulting firm owned by a former New Mexico congresswoman, which advised the company on the best ways to lobby Congress for a renewal of the $2.4 billion deal. Sandia originally won the contract after fierce competition in 1993. The agreement was set to expire in 2012, however, the company was able to obtain several extensions. In sum, the government contends that its use of funds to try and win the contract again (without competing) is simply unacceptable.

The findings rendered by the Department of Energy do not implicate the former member of Congress as integral in any fraudulent plot, nor is she considered part of any wrongdoing.

Contact a reputable whistleblower attorney today

If you work under a government contract and suspect possible misuse of funds, please do not hesitate to contact a False Claims Act attorney at Berger Montague today.