The U.S. Department of Justice recently announced that a $2.5 million settlement was reached to resolve numerous whistleblower allegations against Advanced Containment Systems Inc. and Boh Environmental LLC.

The whistleblower lawsuit alleges major government contractor fraud, as the companies allegedly sold the U.S. Department of Defense steel storage containers that did not meet industry standards.

Container manufacturer Advanced Containment and prime contractor for the Defense Logistics Agency Boh Environmental have been accused of falsely certifying their products met the requirements set by the International Organization for Standardization (ISO).

According to the U.S. Attorney’s Office for the Southern District of Texas, the companies’ containers did not meet these standards and by saying otherwise the companies had allegedly committed serious government contractor fraud.

Legal experts involved in the litigation movement state that companies that “provide supplies to our men and women in uniform must be held to a high standard.”

The settlement recently reached will reportedly resolve the allegations of government contractor fraud. In exchange for agreeing to the settlement, the companies will not admit liability.

Settlement fees have Advanced Containment paying $1.7 million while Boh Environmental will pay $783,000.

Overview of Whistleblower Allegations

According to the attorneys, $496,000 of the settlement amount will go to whistleblower Gonzalo Somarriba. Somarriba worked as a former human resources manager at Advanced Containment from 2004 to 2012, when he was reportedly fired.

Somarriba had filed the whistleblower lawsuit under seal in August 2013, alleging Advanced Containment committed major government contractor fraud by increasing the price of the cost of goods and selling inferior steel containers to the Pentagon.

According to the whistleblower lawsuit, he claimed Advanced Containment had been selling the government up to $100 million worth of equipment since 1998.

The issue of importance with the steel containers is that they are used to contain gear and other important equipment for the military.

The Department of Justice further states that these inferior containers were used in the Iraq war, and that they were used to store hardware, weapons, and other important items, but more importantly were also used as portable command centers.

The whistleblower lawsuit alleges that Advanced Containment and Boh Environmental provided the Department of Defense false ISO certifications and that the ISO quality on the containers were below standard. This indicates the quality of the containers was questionable, and that the containers may have been developed through a questionable manufacturing process.

Even though the companies had later received “legitimate ISO certification,” the damage was done in that the containers had already been sent to the field. Whistleblower attorneys involved in the lawsuit are happy with the result, and that the whistleblower had pursued informing the government of his former employer’s wrongdoing.

According to the whistleblower lawsuit, Somarriba had filed legal action after he brought up his concerns of the containers’ quality with Advanced Containment senior management. The parties moved for a formal dismissal of the lawsuit on Jan. 12, 2017, a request that had been granted Jan. 18, 2017 by U.S. District Judge Alfred H. Bennett.

The Whistleblower Lawsuit is Somarriba ex rel. v. Advanced Containment Systems Inc. et al., Case No. 4:1-cv-02330, in the U.S. District Court for the Southern District of Texas.