The US federal government has this week joined in a civil lawsuit filed by a former employee of the Gallup Organization, claiming that the company inflated exec time and quotes in work for bodies including the US Mint and State Department in 2007-9.
Former Gallup employee Michael Lindley filed the suit under the federal False Claims Act, alleging that the company inflated the number of work hours estimated in contracts well beyond what it considered necessary, as shown in internal estimates. The contracts in question were not put out to competitive tender, meaning that the government had no means of comparing Gallup’s figures, according to Lindley, who suggests that more than $10 million in overpayments were made.
Lindley was Director of Client Services at Gallup from February 2008 until July 2009, and claims he was fired after complaining to bosses about the practice.
The original suit was filed in 2009 but has remained under wraps until now. The Justice Department says it will add its own claims, concerning a Gallup subcontract with the Federal Emergency Management Agency (FEMA).
Stuart F. Delery, acting Assistant Attorney General for the Justice Department’s civil division, said in a statement: ‘Contractors must understand that it is unlawful to use inflated estimates to obtain higher contract prices. The decision to join this civil lawsuit underscores the commitment of the Department of Justice to recover federal funds that are unlawfully claimed.’
Gallup’s General Counsel Steve O’Brien says the claims are ‘meritless’ and the company will fight them ‘vigorously’. He points out that Gallup won competitively bid, fixed-price survey contracts and performed as was required, leaving clients ‘thrilled’ with the results. Quoted on www.omaha.com
, O’Brien added: ‘Now they’re asking us to go back three years later and submit all your records and saying, ‘Couldn’t you have charged a lower price?’... It’s a novel theory.’