United Parcel Service Inc.’s (“UPS”) recent settlement with the Department of Justice(“DOJ”) to resolve allegations that it submitted false claims to the federal government to conceal its failure to timely deliver packages serves as a reminder of the range of conduct that can lead to False Claims Act (“FCA”) liability for not satisfying the terms of a government contract.
The global package delivery giant, through contracts with the U.S. General Services Administration and U.S. Transportation Command, provides delivery services to hundreds of federal agencies. The lawsuit, originally filed under the FCA’s qui tam provision, alleged that from 2004 to 2014, UPS concealed its failure to deliver packages within their guaranteed delivery windows by knowingly recording inaccurate delivery times, applying inappropriate “exception codes” to justify tardy delivery, and providing agencies with inaccurate performance data. UPS’s concealment purportedly deprived the federal government of the opportunity to seek reimbursement for untimely deliveries.
Signaling DOJ’s continued commitment to combatting procurement fraud, Benjamin C. Mizer, Principal Deputy Assistant Attorney General of the Justice Department’s Civil Division, stated, “Protecting the federal procurement process from false claims is central to the mission of the Department of Justice…We will continue to ensure that when federal monies are used to purchase commercial services the government receives the prices and services to which it is entitled.”