Verizon Pays U.S. Government $93.5M to Resolve Overbilling Debacle

By Tara Seals

We may never know if it was simply poor revenue management or whats known as blank check syndrome,” but Verizon Communications Inc. has found itself on the hook for $93,525,410.96 for the U.S. government coffers in order to resolve allegations of overbilling, the Justice Department announced on Wednesday.

The telco is settling a dispute with the General Services Administration (GSA) over inflated invoices for government-wide voice and data contracts. The DoJ says that Verizon, via its MCI subsidiary, submitted false claims for the reimbursement of things that are not reimbursable under the contracts: things like federal, state and local taxes including property taxes, common carrier recovery charges and other unallowable surcharges.

Officials stopped just short of accusing Verizon of intentionally bilking the American coffers. Corporations that contract to provide services to federal, state and local governments must play by the rules,” said Assistant Attorney General for the Civil Division of the Department of Justice, Tony West. We will protect taxpayers against those who seek to charge more than they deserve.”

Nonetheless, the settlement, a result of a coordinated effort by the Commercial Litigation Branch of the Justice Departments Civil Division, the U.S. Attorneys Office for the District of Columbia and GSAs Office of Inspector General and Office of General Counsel, is meant to make an example out of Verizon for any contractor looking to take advantage of bureaucracy to find billing holes to exploit.

A government contract is not a blank check,” said U.S. Attorney Ronald C. Machen Jr. Contractors who overbill the government will be aggressively pursued and required to make the taxpayers whole. This $93 million recovery should make contractors realize that we are firmly committed to ensuring the integrity of corporate billing practices with respect to government programs.”