Whistleblower tells 11th Circuit Army contractor hid leading Iraq security bid

(CN) — A government whistleblower urged the 11th Circuit on Wednesday to revive claims that, during the height of the Iraq War, prime contractor Parsons defrauded taxpayers by ignoring its own “best in class” bidder for armed convoy security and funneling a multimillion-dollar subcontract to a weaker rival, stating the government was kept in the dark.

Relator Billy Joe Hunt, who stands to earn a portion of any monetary award if he prevails, claimed Parsons violated federal contracting rules by bypassing required competitive bidding and sole-sourcing convoy security to Cochise Consultancy Inc. instead of the top-rated bidder.

Hunt’s attorney Trey Mayfield told the court the government-knowledge defense — which Parsons invoked to win summary judgment at the lower court — requires a contractor to fully disclose all “pertinent facts” so the government can make an informed decision.

“The key document in this case is a six-page comparison of the bids,” Mayfield said, noting Cheryl Jones, a contract officer for the Corps, was kept in the dark. “Parsons did not tell the decisionmaker anything about the top-rated bidder, ArmorGroup.”

Mayfield emphasized Parsons also knew the top bidder could mobilize almost immediately, citing deposition testimony from an executive.

“That was never communicated to Cheryl Jones,” Mayfield argued. He added that Parsons also failed to disclose Cochise lacked armored vehicles, had only about half the required personnel at the time and did not meet the same quality standards.

U.S. Circuit Judge Robin S. Rosenbaum, a Barack Obama appointee, pressed Mayfield on the tight timeline, but Mayfield said the top bidder acknowledged it could accelerate delivery if needed. Mayfield said Parsons never passed that along.

Separately, Mayfield said Parsons created post-award documents to cover the company’s tracks and mislead government auditors reviewing payments. “Materiality” under the False Claims Act, he said, means the documents were “capable of influencing” the government, even if auditors never actually saw them.

Representing Parsons, attorney Aaron S. Dyer pushed back, arguing the case had changed dramatically since it was filed. Early bribery claims against Cochise and Corps officials were dropped after discovery.

“Now that there are no longer allegations of bribery,” Dyer said, “the relevant pool for who knew the information changes.”

He insisted the government — not Parsons — drove the decision, with contracting officers directing Parsons to use Cochise because it was the incumbent already on the ground and the only firm that could start within days.

“All of the bids went to the government,” Dyer told the court. “The bid said 26 days from the date of the award.” A single statement about “going sooner,” he argued, was hearsay from one overheard conversation and did not override the written bids or the on-the-ground reality.

Dyer stressed that every Parsons witness believed Cochise was the only viable option at the time.

“The only company that is on the ground is Cochise,” he said. “It’s the only company that has weapons in place, training for these missions and has been doing these missions.”

Senior U.S. Circuit Judge Charles R. Wilson, a Bill Clinton appointee, asked pointedly whether the court would have to assume Jones would have chosen differently if she had the “missing information.”

Mayfield answered that this was a question for a jury. “We don’t have to assume anything,” he said.

Dyer also dismantled the conspiracy claim, noting that even Hunt, in his deposition, could not identify any Parsons employee who agreed to break the law.

“There is no evidence in the record at all that there was any kind of agreement,” he said.

The judges appeared focused on what exactly was disclosed to the government’s decisionmaker and whether the urgent operational needs in a war zone shielded Parsons from liability. The False Claims Act allows whistleblowers like Hunt to sue on behalf of the United States when contractors submit false claims for payment. If Hunt ultimately prevails, Parsons could face triple damages plus penalties for the overpayments that resulted from the claimed improper award.

The panel also included U.S. Circuit Judge Embry J. Kidd, a Joe Biden appointee. The panel took the case under submission after roughly 30 minutes of argument. A decision is expected in the coming months.

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