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Whistleblower settlement puts defense contractors on high alert

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A Cambridge tech company’s recent agreement to settle a False Claims Act suit has contractors for the U.S. Department of Defense scrambling to avoid similar fates for failing to abide by the military’s strict cybersecurity standards.

The U.S. Attorney’s Office announced on March 25 that MORSECORP, Inc. had agreed to pay $4.6 million to resolve allegations that it violated the FCA by failing to comply with DOD cybersecurity requirements in contracts with the U.S Army and Air Force.

In addition, the company agreed to pay $198,616 in attorneys’ fees to Kevin Berich, the whistleblower who filed the qui tam action in U.S. District Court in January 2023.

Berich is represented by Bruce C. Judge and David W.S. Lieberman, of Whistleblower Law Collaborative in Boston.

Judge describes the agreement resolving U.S. ex rel. Berich v. MORSECORP, Inc. as a landmark settlement in the government’s efforts to police the cybersecurity obligations of military contractors.

“One of the things that made this case a challenge was that it involved a new, yet unimplemented, [enforcement] program,” says Judge, a former Department of Justice prosecutor. “[The program] had been announced by the DOJ, but we hadn’t seen a successful result.”

According to Judge, under the DOJ program launched in 2021, the FCA would be used to bring about compliance with the DOD’s cybersecurity standards.

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