On July 8, 2022, the Department of Justice ("DOJ") announced in a press release that Aerojet Rocketdyne Inc, a provider of advanced propulsion and energetics systems for multiple government agencies, reached a settlement agreeing to pay $9 million against allegations that Aerojet violated the Federal False Claims Act ("FCA") by misrepresenting its compliance with cybersecurity requirements in certain federal government contracts.

Against the backdrop of the Civil Cyber-Fraud Initiative announced by the DOJ on October 6, 2021, this settlement underscores the DOJ's commitment to FCA enforcement actions pertaining to cybersecurity. Notably, it also serves to highlight that plaintiffs' qui tam or whistleblower provision of the FCA is effective in assisting the government to identify and pursue potentially fraudulent cybersecurity conduct.¹

In light of the settlement, the breadth of qui tam enforcement and the increased regulatory scrutiny and civil cyber-fraud initiatives, companies providing services to the federal government should assess and potentially bolster their cybersecurity compliance efforts, ensuring that all disclosures pertaining to the company's cybersecurity infrastructure and protections are accurate and complete.

To learn more about the DOJ's Civil-Cyber Fraud Initiative, please review our client alert on this topic.

The Aerojet Settlement

Government contracts are subject to the Defense Federal Acquisition Regulations ("DFARS") which safeguards unclassified...

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