Booz Allen Pays $377.5 Million to Settle Government Billing Case

The consulting firm Booz Allen Hamilton has agreed to pay $377.5 million to settle a federal lawsuit that accused it of falsely billing the U.S. government, the Justice Department said on Friday.

The settlement resolves allegations that between 2011 and 2021, Booz Allen improperly charged the government for indirect costs that it should have billed under its commercial and international contracts, the Justice Department said in a news release. The government had alleged that the firm “obtained reimbursement from the government for the costs of commercial activities that provided no benefit to the United States.”

A consulting firm’s indirect costs can include expenses like equipment, marketing and office space.

Booz Allen, which is based in McLean, Va., has lucrative defense and intelligence contracts with the federal government. Investigators began reviewing the firm’s billing practices in 2016.

“Government contractors must turn square corners when billing the government for costs under government contracts,” Brian M. Boynton, principal deputy assistant attorney and head of the Justice Department’s civil division, said in a statement.

Matthew M. Graves, U.S. attorney for the District of Columbia, said in the news release that the settlement was “one of the largest procurement fraud settlements in history.”

A spokeswoman for Booz Allen said in a statement on Friday that the company believed it had acted “lawfully and responsibly.”

“It decided to settle this civil inquiry for pragmatic business reasons to avoid the delay, uncertainty and expense of protracted litigation,” the spokeswoman said. “The company did not want to engage in what likely would have been a yearslong court fight with its largest client, the U.S. government, on an immensely complex matter.”

A parallel criminal investigation into the allegations by the Justice Department was closed in 2021 with no charges. An investigation by the Securities and Exchange Commission is continuing.