September 3, 2024
Avantor, Inc, a global player in the scientific and technical supply sector, has agreed to a $5 million settlement in a False Claims Act (FCA) case. The FCA case alleged that an Avantor subsidiary, VWR International, LLC (VWR), overcharged federal agencies for supplies. The procurement contracts at issue were with multiple federal agencies. They included the Department of Defense, the Department of Veterans Affairs, the General Services Administration, and others.
Under the terms of these contracts, VWR promised that the prices it offered to the government would be the same or better than the lowest price offered to its other customers. This provision requiring best prices for the government is typical in government contracts – it’s known as The Most Favored Customer (MFC) clause. Thus, if a contractor gives a better deal to a private customer, it must also give the same – or better – deal to the government.
The government expects companies to comply with the MFC clause. Failure to do so can result in liability under the False Claims Act.
This settlement under the False Claims Act demonstrates that the federal government will hold accountable contractors that overcharge agencies by failing to follow the pricing terms of federal contracts, and should be seen as a warning to contractors that false claims have no place in government purchasing.
-United States Attorney for the Eastern District of Pennsylvania Jacqueline C. Romero in announcing the settlement.
The government alleges that VWR overcharged federal agencies for laboratory supplies ranging from chemicals and glassware to protective clothing. VSR sold these supplies under contracts containing MFC clauses. Specifically, the government accused VWR of failing to provide federal purchasers with prices and discounts that matched those offered to its most favored private-sector customers. Furthermore, the company allegedly raised prices for government buyers, but not for its private-sector clients. Also, VWR allegedly failed to adjust pricing or offer refunds as required by the terms of its government contracts.
As a result of this conduct, the government contended that VWR submitted false or fraudulent claims in violation of the False Claims Act.
The overpricing allegations came to light when a former VWR employee filed a qui tam, or whistleblower, case under the False Claims Act. The qui tam provision permits individuals with knowledge of fraud against the government to bring a lawsuit on behalf of the United States and to share in any recovery. In this case, the whistleblower will receive approximately $1.1 million of the $5 million settlement proceeds as his reward.
Whistleblower Law Collaborative LLC, based in Boston, devotes its practice entirely to representing clients nationwide in bringing actions under the federal and state False Claims Acts and other whistleblower programs. Our firm represents whistleblowers who report fraud against government programs. If you know of a government contractor that has violated its contract requirements, contact us for a confidential consultation.