United States Ex Rel. Keaveney v. SRA International, Inc.
219 F. Supp. 3d 129
| D.D.C. | 2016Background
- Qui tam relators Keaveney and Brennan (K2GS principals) allege SRA and Triton made false statements and submitted false claims to obtain and bill under a DOD task order (task proposals, monthly status reports, invoices). Relators filed an amended complaint after the government declined intervention.
- Alleged misconduct (2007–2008) includes fraudulent inducement ("bait-and-switch" substituting personnel/subcontractors), false MSRs, inflated/phantom overtime and travel charges, excessive pass‑through fees, mischaracterized direct labor, and a kickback scheme.
- Contracting structure: SRA (prime; Galaxy subsidiary) and Triton (joint-venture/subcontractor) won the task order; Triton hired second‑tier subcontractors including K2GS and Jim Song. Relators contend subcontractors did most work but were misrepresented or replaced.
- Procedural posture: Defendants moved to dismiss under Fed. R. Civ. P. 12(b)(6) and 9(b). The Court reviewed relation‑back, seal/ pre‑filing requirements, and pleaded elements of various FCA theories (fraudulent inducement, presentment, and material false statements).
- Disposition summary: Court GRANTED in part and DENIED in part. It allowed Count III (false MSRs) against both defendants and Count V (overtime overbilling) against Triton only; all other counts were dismissed.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Relation‑back / statute of limitations | Amended complaint merely elaborates original claims; relates back under Rule 15(c) | Amended complaint advances new theories and claims beyond original; time‑barred | Related back; amended complaint timely (relation to same contract) |
| Seal / pre‑filing (31 U.S.C. §3730(b)(2)) | Only original complaint needed to be sealed; amended complaint may be public after unsealing | Amended complaint should also have been filed under seal | Complaint complied: original was sealed; government declined; court unsealed and ordered public filings; no dismissal |
| Fraudulent inducement (bait‑and‑switch; Triton solvency) | Defendants misrepresented personnel, hid subcontractors, and concealed Triton insolvency to induce award | Task proposals actually disclosed Keaveney; alleged omissions contradicted by attached proposals; legal/regulatory duties cited inapplicable or unstated | Counts I and IV(a) DISMISSED for failure to plead plausible misrepresentation (and thus no fraudulent inducement) |
| Presentment: overtime / invoices / travel / direct labor | Defendants submitted false invoices: fictitious/overstated overtime, travel not taken, mischaracterized direct labor, excessive pass‑through fees | Many allegations sound in contract (not FCA); invoices consistent with proposals; relevant FAR/regulations inapplicable or post‑dating contract; plaintiffs fail particularity or knowledge allegations for some defendants | Overtime overbilling claim (Count V) survives against Triton (sufficient plausibility and particularity); overtime claim against SRA dismissed (no knowledge alleged). Travel and direct‑labor claims DISMISSED. Pass‑through fee claims (Count II) DISMISSED (reliance on regulations not in effect at contract time). Kickback claim (Count VI) DISMISSED (no identified false claims) |
| Material false statements (MSRs and ARPBS projections) | MSRs and ARPBS projections contained false/omissive representations material to payment and future awards | MSRs are not "claims"; alleged statements not false or not material; personnel substitutions are contract breach | Count III (false MSRs) survives (sufficiently alleged falsity, knowledge, materiality, and particularity). Count IV(b) re: ARPBS projections DISMISSED (breach‑of‑contract framing and lack of materiality) |
Key Cases Cited
- Browning v. Clinton, 292 F.3d 235 (D.C. Cir. 2002) (Rule 12(b)(6) standard and accepting allegations at motion‑to‑dismiss stage)
- Ashcroft v. Iqbal, 556 U.S. 662 (2009) (plausibility pleading standard)
- U.S. ex rel. Williams v. Martin‑Baker Aircraft Co., 389 F.3d 1251 (D.C. Cir. 2004) (Rule 9(b) particularity for fraud: time, place, content, persons)
- U.S. ex rel. Miller v. Bill Harbert Int’l Constr., Inc., 608 F.3d 871 (D.C. Cir. 2010) (relation‑back analysis focuses on whether amendment arises from same conduct/contract)
- U.S. ex rel. Schwedt v. Planning Research Corp., 59 F.3d 196 (D.C. Cir. 1995) (fraudulent inducement theory under FCA requires an initial misrepresentation that induced the contract)
- U.S. ex rel. Folliard v. CDW Tech. Servs., Inc., 722 F. Supp. 2d 20 (D.D.C. 2010) (FCA presentment elements and Rule 9(b) application)
- United States v. Toyobo Co., 811 F. Supp. 2d 37 (D.D.C. 2011) (distinction between factually and legally false claims; implied certification discussion)
- U.S. ex rel. Bettis v. Odebrecht Contractors of Cal., Inc., 393 F.3d 1321 (D.C. Cir. 2005) (fraudulent inducement claims under the FCA)