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Middleman Settles in Defense Contractor Whistleblower Case

by | Sep 11, 2013 | Firm News

The U.S. government has announced a settlement with the middleman at the center of a wide-ranging scheme to obtain defense contracts by circumventing the bidding process.  Steven Stallings acted as a broker agent inappropriately securing government contracts for major defense contractor SAIC without going through required contract procedures.  Stallings, who worked for the New Mexico Institute of Mining and Technology at the time, but was based in Valrico, Florida, has agreed to pay the government $105,000 for his role in the fraud.  Stallings settlement comes on the heels of a larger settlement for nearly $6 million with SAIC.

Stallings has also agreed to cooperate fully with investigations currently pending by the United States into other entities, including another contract broker located in Crane, Indiana, Lawrence Solliday.  Solliday was director of the Naval Surface Warfare Center and also worked for SAIC.  The settlement does not preclude any possible criminal charges against Stallings that could result from the investigation.

The case was brought to light by whistleblower Timothy Ferner, who is a client of the James Hoyer Law Firm.  Ferner is a retired Lieutenant Colonel with the Air Force and was stationed at Nellis Air Force Base in Las Vegas, Nevada, where many of the inappropriate contract orders were executed.

“This is the second settlement in this case, which resulted from the brave actions of our whistleblower coming forward and putting his career on the line,” said James Hoyer Partner Elaine Stromgren. “It’s very important, because it shows that the government is not only holding the company, SAIC, accountable but also the individual who played such a significant role in executing this impropriety.”

Stallings was the key contact between SAIC and military personnel at multiple Department of Defense entities, including Nellis Air Force Base and MacDill Air Force Base in Tampa, Florida. Stallings claimed to be a high ranking government official who had authority to bypass the bidding process, which was not true.  As a result, the settlement agreement says “Stallings caused SAIC to submit to GSA (General Services Agency) over 360 invoices for work on various Task Orders under the BPA (Blanket Purchase Agreement).”  Stallings actions led to SAIC being awarded millions of dollars in improper government funding.

Lt Col Ferner became suspicious that normal contract procedures were bypassed and repeatedly reported his concerns to his supervisor.  He was alarmed that his superiors condoned and wanted to cover up the violation.  When no action was taken, he felt compelled to report his concerns to the Office of Investigative Services.  That led to retaliation against him for going over his supervisor’s head.  Lt Col Ferner was ultimately fired from his position and transferred to a job with little responsibility.  He felt filing a whistleblower lawsuit was the only way to expose the wrongdoing and recover the taxpayer dollars inappropriately obtained by SAIC.

“Lt Col Ferner is a testament to courage in the face of institutional pressure to keep quiet and go along. Thanks to his perseverance, the American taxpayers have not only recovered some of the money wasted, but also can rest assured that there will be increased scrutiny on these types of blanket contracts moving forward,” said Stromgren.

As provided under the qui tam provision of the False Claims Act, Ferner will receive a portion of the settlement as a reward for bringing the fraud to light.


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