Food Vendor Chartwells Settles DC School District Whistleblower Lawsuit at $19M

Washington DC school district’s food vendor Chartwells has agreed to settle a DC False Claims Act whistleblower lawsuit at $19 million to resolve allegations that it overcharged the city for school food supplies. Whistleblower Jeffrey Mills will receive a portion of that settlement for exposing the alleged contract breaches in a not yet announced amount, typically 15 to 25% of the settlement. Mills urges school districts using private food vendors to inspect vendor contracts and performance.

Food Vendor Chartwells Settles DC School District Whistleblower Lawsuit at $19M

Whistleblower Jeffrey Mills Alleges Chartwells Cost School District Millions

Jeffrey Mills, former Director of the Office of Food and Nutritional Services for the Washington DC school district, filed a whistleblower lawsuit against Chartwells and Thompson Hospitality, the group that provided food services for the district’s schools since 2008.

The DC school district entered into a contract with Chartwells to provide food services (previously supplied in-house) to save money and increase the nutritional value of school meals. Chartwells was required to acquire goods at the lowest available price under the terms of the agreement.

Mills alleged that Chartwells cost the DC school district millions by using a corporate affiliate to buy foods from high-priced food manufacturers. Other allegations claimed that Chartwells mishandled contracts by delivering supplies late, delivering spoiled products and delivering food items in short supply.

Jeffrey Mills Also Takes $450,000 in Anti-Retaliation Settlement

Mills was fired in 2013 and filed a separate anti retaliation lawsuit with the school system in 2014 alleging he was fired for reporting the contract mismanagement. The lawsuit settled at $450,000.

Compass Group USA, Chartwells’ parent company, paid $18 million in 2012 to resolve allegations that they failed to offer price reductions required in their contracts.

AG Racine: Settlement Ensures Contractors Held Accountable in Fulfilling Contract Obligations

Mills’ qui tam complaint (whistleblower lawsuit) was investigated by the Washington DC Attorney General Karl A. Racine. After reading the complaint, Racine’s office filed in support or Mills’ allegations. “It is important to ensure that contractors who receive district funds are held accountable for fulfilling their obligations under the contracts, and today’s settlement does just that,” said Racine.

DC School District Will Receive $14M from Settlement with Food Vendor

Chartwells agreed to pay $19 million to resolve the DC False Claims Act lawsuit. The settlement provides that $14 million will go to school system credits and payments and $5 million to school philanthropic support ($1 million to non-profit organizations that promote literacy, provide mentors, college scholarships and academic enrichment, and $4 million to the DC Public Education Fund for Innovative Programs).

The DC False Claims Act’s qui tam provision allows individuals to bring lawsuits on behalf of the District and share in any recovered monies. Mills could receive up to 30 percent of the $19 million settlement, though the award amount has not yet been determined.

According to Chartwells’ spokesman Owen Donnelly, the company denies any wrongdoing and has agreed to resolve the issues so that focus continues to be on nourishing the bodies, minds and spirits of students. The settlement does not constitute any admission of misconduct by the contractor.

“The issue of private food vendors prioritizing profits over the well-being of students is a national concern,” Mills said. “District funds should be used to feed students the best quality food at the lowest cost. I urge all school districts using private food vendors to examine their contracts and the performance of those vendors.”

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