On July 8, 2022, the U.S. Department of Justice announced a $9 million settlement with federal government contractor Aerojet Rocketdyne, Inc. for alleged violations of the False Claims Act (FCA) in a case pending in the Eastern District of California. The settlement results from alleged false statements by Aerojet related to compliance with Department of Defense cybersecurity requirements described in DoD Federal Acquisition Regulation Supplement (DFARS) clause 252.204-7012 and National Aeronautics and Space Administration Federal Acquisition Regulation Supplement (NFARS) clause 1852.204-76.
The settlement further underscores DOJ’s commitment to FCA enforcement actions involving cybersecurity considerations related to its Civil Cyber-Fraud Initiative announced in October 2021. To that end, the settlement serves as a clear reminder to contractors that DOJ and the plaintiffs’ qui tam bar are taking the Cyber-Fraud Initiative seriously and suggests that close understanding of and adherence to federal agency contractual cybersecurity requirements have become important mandates for the government contracting community broadly and the defense industrial base in particular.
In the Aerojet case, a relator, the former senior director of cybersecurity, compliance and controls at Aerojet, filed a whistleblower suit in October 2015 under the qui tam, or whistleblower, provisions of the FCA, alleging that Aerojet had misled the DoD and NASA about its cybersecurity compliance posture....
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