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A Norfolk-based government contractor will pay $142,500 to settle civil fraud allegations that employees overcharged the United States Navy for labor.
Fairbanks Morse Engine, located on the 900 block of Scott Street, was accused of overcharging the Navy for engine repairs on the USS Ashland, a Whidbey Island class ship, according to a Thursday news release from the Department of Justice.
The company had two subcontracts for work on the Ashland, one that was fixed price and the other that was based on time and materials. Supervisor hours, which should have been included in the fixed-price subcontract, were charged to the time-and-materials subcontract, the release states.
Although the company took corrective actions to resolve the problem, including repaying money owed and disclosing the conduct to the Department of Defense Office of Inspector General, it also agreed to pay $142,500 to settle alleged False Claims Act violations, according to the release.