NEWS19 July 2013

Gallup settles contract price allegations with US government

Government Legal North America

US — Polling and market research firm Gallup has agreed to pay $10.5m to settle allegations that it inflated contract prices and illegal engaged in employment negotiations with a Federal Emergency Management Agency (Fema) official.

The US government alleged that Gallup knowingly overstated its true estimated labour hours in proposals to the US Mint and State Department for contracts and task orders that were to be awarded without competition.

Because of Gallup’s conduct, the complaint alleged, the two federal agencies awarded Gallup contracts and task orders at falsely inflated prices.

In addition, Gallup was accused of improper employment negotiations with a then Fema official, Timothy Cannon, in order to obtain a Fema subcontract at an inflated price and additional Fema funding after the subcontract had been awarded.

Gallup has entered into an Administrative Agreement with the Department of Homeland Security where it agreed to enhance its corporate compliance and ethics programs. As a result, the department has lifted Gallup’s ban on tendering for government contracts.

The polling firm has also entered into a Non-Prosecution Agreement with the US Attorney’s Office for the District of Columbia and has further agreed to strengthen its corporate compliance and ethics programs and to pay a penalty of $50,000.

District of Columbia US Attorney Ronald Machen said: “With this settlement, we have held the contractor accountable for overbilling the government and returned $10.5m to the federal treasury. This significant corporate settlement and the related criminal prosecution should send a clear message that contractors and government officials alike must operate with honour and integrity.”