Document storage firm Iron Mountain paid $44.5 million to settle allegations of government procurement fraud. Whistleblowers Brent Stanley and Patrick McKillop filed a False Claims Act lawsuit in California alleging Iron Mountain overcharged federal entities for record storage services. Stanley and McKillop will collect just over $8 million for alerting the government to the company’s alleged fraudulent contract violations.
Brent Stanley and Patrick McKillop Allege Iron Mountain Overcharged GSA
From 2001 to 2014, Boston based Iron Mountain Inc. and Iron Mountain Information Management LLC provided government record storage services via the General Services Administration’s (GSA) Multiple Award Schedule (MAS) program, a program that supplies the government with a structured means of obtaining commercial goods and services.
Brent Stanley, a former Iron Mountain employee, and Patrick McKillop, a records management industry worker, came together to file a civil whistleblower (qui tam) complaint in the Eastern District of California. The qui tam plaintiffs alleged that Iron Mountain failed to supply accurate information about company sales practices during GSA contract negotiations and failed to extend discounted prices to government clients.
Storage Firm Cheats Strained Government Budget Out Of Lowest Prices
Under the GSA contract’s Price Reduction Clause, Iron Mountain was required to apply a price reduction if it offered lower prices to other specified customers. While Iron Mountain was in violation of the price reduction clause, the claims they made were false claims.
False statements are the most frequent charges made in procurement fraud cases. The prices billed to the government were greater than those agreed to in the GSA contract. Had Iron Mountain truthfully communicated their company practices, GSA would likely not have entered into a contract and the United States would not have lost government funds to higher rates.
“Protecting the federal procurement process from false claims is central to the mission of the Department of Justice,” said Joyce R. Branda of the Justice Department’s Civil Division. “We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”
Iron Mountain Settles False Claims Procurement Fraud Lawsuit at $44.5M
Iron Mountain companies have agreed to pay $44.5 million to resolve the False Claims Act civil lawsuit. The Department of Justice said there has been no determination of liability in this settlement.
Under the False Claims Act, private parties may file suit for false claims on behalf of the government and collect a portion of the recovery. Stanley and McKillop will share in $8 million of the $44.5 million settlement amount as a whistleblower award. Knowledge that a company is committing procurement fraud almost always must surface from an inside source, making whistleblowers invaluable in bringing these violations to light.
“This settlement illustrates our commitment to protecting the integrity of federal contracting programs,” said U.S. Attorney Benjamin Wagner. “Federal agencies rely on pricing information under the Multiple Award Schedule program in particular, and deserve the full benefit of applicable contract terms.”