Government contractor NORESCO has settled for $9.6 million over allegations of overcharging the federal government, according to an announcement from U.S. Attorney Leah B. Foley. The Westborough, Massachusetts-based company was alleged to have violated the False Claims Act in connection with 29 federally-funded energy saving performance contracts, as reported by the U.S. Department of Justice. These contracts were touted to procure energy savings and improvements with no initial expenses for a number of federal agencies.
Amidst the settlement, it's come to light that NORESCO's alleged misconduct included wrongfully inflating the project price for the U.S. Navy, and this included contingency costs that were not initially disclosed. The situation unfolded after Navy officials had only partially agreed to the initial request of contingency costs by NORESCO, when they then directed two of its subcontractors to add an additional $3.46 million to cover "potential unknown contingencies." NORESCO has repaid these costs after the investigation began, according to the U.S. Attorney’s Office.
Furthermore, the settlement also brings to close the issue of NORESCO inappropriately calculating and thus overcharging for financing costs across the board on numerous projects. In the midst of the government's investigation into the Navy transactions, NORESCO voluntarily admitted to the miscalculations which affected the total financial outcome of several contracts. Their self-reported errors...
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