U.S. Joins Whistle-Blower Lawsuit Against Jacobs

The federal government has joined a whistle-blower lawsuit against Jacobs Engineering Group Inc. that alleges the Pasadena-based company overcharged the military and other government agencies for environmental cleanup projects during the last several years, the U.S. attorney’s office said Monday.

The agencies, which include the Air Force, Army, Navy, NASA, the Environmental Protection Agency and the Energy Department, were billed more than $12 million in “unallowable” overhead costs for jobs dating to 1987, according to the suit, which was filed under seal last July by a former employee.

The complaint, which was unsealed after the government joined the suit March 3, alleges that Jacobs improperly passed along rental costs for its former corporate headquarters on Lake Avenue in Pasadena by charging higher contract rates for jobs such as cleaning up contaminated government sites, U.S. Atty. Donna Maizel said.

In a statement issued Monday, the company denied any wrongdoing.

“Jacobs did not bill for any charges that it did not in fact incur, and [it] believes its accounting treatment of the questioned lease charges complied with applicable regulations,” the statement said.

The suit claims Jacobs charged higher contract rates to make up for the rental costs, which is prohibited under federal acquisitions regulations. The complaint also alleges the company falsely certified that all such unallowable costs had been identified and excluded from its bills.