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What Happens When You Over Charge The Government??

Six months after being forced to pay back customers for incorrect billing practices, Verizon has settled yet another claim and this one with none other than the U.S. Government for $93.5 million. The fine comes after Verizon overcharged the General Services Administration (GSA) for taxes and various surcharges. The MCI Communications unit (a Verizon subsidiary) provided the GSA with both voice and data services. The charges includes claims that Verizon submitted falls reimbursements for property taxes, recovery charges and surcharges which were not allowed.

The Government alleged that MCI Communications Services Inc invoiced GSA for certain federal, state and local tax charges and surcharges, violating terms of the contracts and applicable regulations in connection the the FTS2001 and FTS2001 Bridge contracts.

A spokesman for Verizon said that the company continued to disagree about fees that could be charged under the terms of the contract, but believed settling the matter “amicably and without further litigation” was in its best interest. The spokesman for Verizon had this to say:

“Verizon cooperated closely with the government throughout the process,” while adding, “It was in the best interest of all parties to settle the matter. The government and Verizon disagreed on whether certain fees could be charged under the contract, so their settlement concludes the efforts by both parties to resolve the dispute amicably.”

“A government contract is not a blank check,” said U.S. Attorney Ronald C. Machen Jr. “Contractors who overbill the government will be aggressively pursued and required to make the taxpayers whole. This $93 million recovery should make contractors realize that we are firmly committed to ensuring the integrity of corporate billing practices with respect to government programs.”

The settlement is a result of a joint investigation between the DOJ Civil Division’s Commercial Litigation Branch, the GSA’s Office of Inspector General and Office of General Counsel, and the U.S. Attorney’s Office for the District of Columbia.

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