Honeywell Aerospace to Pay Over $2M to Resolve Whistleblower-Initiated False Claims Act Case Relating to Cybersecurity Requirements

By the Constantine LLP Whistleblower Team

The Department of Justice (“DOJ”) recently announced that Honeywell Aerospace, Inc. agreed to pay over $2 million to resolve False Claims Act claims originally initiated by a whistleblower relating to alleged failures to comply with cybersecurity requirements in a contract with the U.S. Department of Defense (“DoD”).[1]  As this settlement shows, cybersecurity continues to be a key area of focus for False Claims Act enforcement.

What Were the Allegations in the False Claims Act Case?

According to the DOJ, this False Claims Act case alleged that a Honeywell International Inc. business unit submitted false claims for payment to the government by failing to have one of its networks in compliance with cybersecurity requirements of the contract and applicable regulations.[2]  In particular, Honeywell allegedly failed to comply with the NIST (or National Institute of Standards and Technology) Special Publication 800-171, which sets forth certain requirements to protect controlled unclassified information (or CUI) in nonfederal systems, like defense contractors’ networks.[3]

Was a Whistleblower Involved in this Case?

Like many False Claims Act cases, this case was originally initiated by a whistleblower named Rachel Tenney, who was a former Honeywell employee.  Under the qui tam (or whistleblower) provisions of the False Claims Act, private parties (called relators) may file lawsuits on behalf of the government and receive up to 30% of the recovery.[4]

What Have Government Enforcers Said in Connection with the Settlement?

In announcing the settlement, federal enforcers emphasized the importance that government contractors comply with applicable cybersecurity requirements and the potential consequences if they do not.

DOJ Assistant Attorney General Brett Shumate stated, “Government contractors that obtain defense information in administering their contracts must follow required cybersecurity standards.  The Justice Department will continue to investigate potential violations of these cybersecurity requirements to protect this critical information.”[5]

Russ Ferguson, U.S. Attorney for the Western District of North Carolina, echoed those sentiments.  “Cybersecurity requirements and standards for federal contractors are in place for a reason: to protect government systems and prevent unauthorized access to government data.  Companies that seek and profit off of government contracts have an obligation to ensure sensitive data is protected.”[6]

What Are Common Types of Procurement Fraud?

Government contract fraud, also known as procurement fraud, can be orchestrated and carried out by various kinds of companies or individuals, including prime contractors and subcontractors, and can take many different forms. Some examples of procurement fraud include knowingly submitting false claims to the government for payment and providing products or services that fail to meet legal or contractual specifications, including cybersecurity requirements; materially misrepresenting or inflating costs; improperly allocating or shifting costs between contracts; or obtaining government contracts through bid-rigging, bribery, or other illegal means.

Our Firm Helps False Claims Act Whistleblowers

Constantine LLP attorney Dan Noel commented, “This settlement emphasizes the importance of following applicable cybersecurity requirements in defense contracts. Government contractors must comply with those requirements to protect sensitive government data and national security.” “Whistleblowers play a key role in alerting the government to cybersecurity vulnerabilities and ensuring that government contractors do not ignore these critical safeguards,” Noel added.

Constantine LLP has significant experience representing whistleblowers under the False Claims Act. The firm represented a whistleblower in the first successful cybersecurity False Claims Act case ever brought under the statute. That case resulted in Cisco Systems paying $8.6 million to settle allegations of selling the government video surveillance software vulnerable to unauthorized access and manipulation. Our client received a whistleblower award totaling 20% of the government’s recovery.

If you think you have a case, would like to learn about our firm’s False Claims Act successes, or would like to learn more about what it means to be a whistleblower, please contact us and we will connect you with a member of the Constantine LLP whistleblower team for a free and confidential consultation.

Speak Confidentially With Our Whistleblower Attorneys

[1] https://www.justice.gov/usao-wdnc/pr/honeywell-aerospace-inc-agrees-pay-over-2m-settle-false-claims-act-allegations-failing (DOJ press release).

[2] Id.

[3] Id.; see also https://csrc.nist.gov/pubs/sp/800/171/r3/final.

[4] https://www.justice.gov/usao-wdnc/pr/honeywell-aerospace-inc-agrees-pay-over-2m-settle-false-claims-act-allegations-failing (DOJ press release).

[5] Id.

[6] Id.

Tagged in: False Claims Act, qui tam,