United States ex rel. Hutchins v. Dyncorp Int'l, Inc.

342 F.Supp.3d 32

UNITED STATES of America EX REL. Charles HUTCHINS and Joyce Subhi, Plaintiff-Relators,

v.DYNCORP INTERNATIONAL, INC., et al., Defendants.

Civil Action No. 15-355 (RMC)

United States District Court, District of Columbia.

Signed September 28, 2018

J. Michael Weston, Pro Hac Vice, Bennett, Weston, LaJone & Turner, P.C., Dallas, TX, Edward A. McConwell, Sr., Mcconwell Law Offices, Mission, KS, Laura Lee McConwell, Pro Hac Vice, Mission, KS, for Plaintiff

Vincent H. Cohen, Jr., Dechert, LLP, Washington, DC, Frederick G. Herold, Pro Hac Vice, Dechert LLP, Mountain View, CA, William T. McEnroe, Pro Hac Vice, Dechert, LLP, Philadelphia, PA, for Defendant.

ROSEMARY M. COLLYER, United States District Judge

Charles Hutchins and Joyce Subhi sue their former employer DynCorp International, Inc., and related entities under the False Claims Act, alleging that DynCorp falsified invoices; billed at unreasonable rates; charged the federal government for services not performed; provided sub-par goods and services, or failed to provide them at all; hired unqualified individuals; and otherwise submitted unwarranted claims for payment for providing logistical and operational support to the United States Army. Plaintiffs also allege retaliation. After the United States declined to intervene, DynCorp moved to dismiss for failure to state a claim and a lack of sufficient particularity in alleging fraud. Having reviewed the record carefully, the Court finds that only one of Plaintiffs' many alleged claims states a plausible violation of the False Claims Act. Plaintiffs' other claims allege possible contract breaches but not fraud. Finally, because Plaintiffs did not engage in protected activities prior to their separations from DynCorp, there is no evidence of retaliation. The motion to dismiss will be granted in part and denied in part.

I. BACKGROUND

The United States Army administers the Logistics Civil Augmentation Program (LOGCAP) through which it contracts with private-sector companies to provide "contingency support to augment the Army force structure" in various military operations, including active combat in Afghanistan and Iraq. Am. Compl. [Dkt. 24] ¶ 26. Defendant DynCorp International Inc. is a global government services provider, which provides base operations, supply chain management, and infrastructure support. Defendant DynCorp International LLC is a wholly-owned subsidiary of DynCorp International Inc. and provides operational support to U.S. forces in combat, peacekeeping, humanitarian, and training missions around the world, including Afghanistan. Referred to herein as "DynCorp," the DynCorp International companies were awarded an Army contract in April 2008, known as LOGCAP IV, to "provide[ ] logistic and other support services via a mission focused task order for a designated geographical or operational area region," including providing goods and services to camps and forward operating bases in Afghanistan. Id. ¶¶ 29, 32, 34. This contractual relationship between DynCorp and the U.S. Army was governed by the Federal Acquisition Regulation (FAR), 48 C.F.R. 1.000 et seq. , and the Defense Federal Acquisition Regulation Supplement (DFARS), 48 C.F.R. 201 et seq. Id. ¶ 30.

Plaintiffs Charles T. Hutchins and Joyce Subhi are former employees of DynCorp. Mr. Hutchins was hired by DynCorp in September 2010 as a senior manager of subcontracts ("subcontracts senior manager") at Kandahar Air Field and Camp Leatherneck in Afghanistan. Id. ¶ 13. Ms. Subhi was hired in May 2011 as a subcontracts senior manager primarily in Afghanistan. Id. ¶ 16. A subcontracts senior manager is responsible for "managing complex procurement and administrative activities for major government subcontracts consistent with customer requirements, government regulations, and company policies and procedures," which includes ensuring "that DynCorp International complies with contract requirements so that DynCorp International can represent to the United States that it is in compliance with the United States' regulatory and contractual requirements." Id. ¶¶ 13, 16. Mr. Hutchins and Ms. Subhi were terminated from employment with DynCorp in 2012 and 2013, respectively. Id. ¶¶ 177, 280.

Plaintiffs argue that they have personal knowledge of the alleged facts, unless otherwise noted in the Amended Complaint. Pls.' Mem. in Opp'n (Opp'n) [Dkt. 42] at 3. They also assert that they "are experts in the areas about which they complain and worked," and, finally, that each of them is an attorney with "training in how to construe statutory language, regulations and contractual provisions."¹ Id.

A. The Terms of DynCorp's LOGCAP IV Contract

The LOGCAP IV contract between DynCorp and the U.S. Army specified that DynCorp would provide services and equipment to support the Army's operations in Afghanistan. In this lawsuit, Mr. Hutchins and Ms. Subhi allege that DynCorp failed to provide the services required under the contract, failed to furnish equipment that met the standards required by the contract, and otherwise fell short of contractual requirements, but, nonetheless, submitted claims for, and received, the corresponding contractual payments from the Army.

1. Waste Management

Plaintiffs contend that DynCorp improperly billed the Army for waste management and related services that were not approved, were duplicative, or were otherwise improper. DynCorp has provided waste management services at over 20 bases in Afghanistan since August 2009 under the LOGCAP IV contract. Id. ¶¶ 54, 64. This work was initially subcontracted to various non-DynCorp contractors that supplied their own vehicles, equipment, and personnel; each subcontractor billed DynCorp monthly and, after paying the subcontractors, DynCorp sought reimbursement from the Army. Id. ¶¶ 64-65.

DynCorp began taking steps to perform these waste management services itself, instead of using subcontractors, in September 2011. Id. ¶ 60. About that time, it leased and shipped waste management equipment and vehicles to Kandahar Air Field. Id. The Amended Complaint alleges that DynCorp employees discussed its intention to self-perform waste management services in that month and that DynCorp "hoped to make more money by self-performing these services." Id. ¶ 67. The Amended Complaint additionally alleges that Ms. Subhi attended a cost-analysis meeting sometime in late 2011 and that one analysis indicated an additional cost to the Army of $1,200,000/year for DynCorp waste management services at one base and an additional $1,000,000/year for similar DynCorp services at another base. Id. ¶¶ 68-72. Plaintiffs allege that DynCorp intended to perform waste management services for at least 27 bases in Afghanistan. Id. ¶ 74.

In order to perform such services itself, DynCorp allegedly executed leases for hundreds of waste management and water delivery vehicles, "worth millions of dollars," and had them shipped to Kandahar Air Field before DynCorp notified the Army of its intention to self-perform, and without requesting prior approval from the Army's Administrative Contracting Officer (ACO).² See id. ¶¶ 76-77. Plaintiffs identify multiple purchase orders that allegedly pertain to these activities but identify relevant leased goods on only two of them: purchase order LG40032418 for $1,385,226 and approved on November 2, 2011, to lease numerous vehicles, including some at Spin Boldak, a base in Afghanistan; and purchase order LG40030861 for $101,400, to lease one trash truck. Id. ¶¶ 83-86.

DynCorp notes that Plaintiffs allege that the waste management vehicles and equipment were flown on C-130 military aircraft to U.S. military bases in Afghanistan from subcontractors in South Carolina and Dubai. Id. ¶¶ 82, 105. It asserts that such transport would have been well-known to the Army, because it would require military coordination and authorization. DynCorp Mem. at 12. Plaintiffs allege that DynCorp failed to get prior approval from the "Administrative Contracting Officer in Houston, Texas." Id. ¶ 60 (emphasis added); see also id. ¶ 76. DynCorp argues that Plaintiffs do not, and cannot, allege that there was no government approval, from either the Administrative Contracting Officer in Afghanistan or another official.³

According to the Amended Complaint, Mr. Hutchins learned from an unidentified member of the Projects Control Department at Camp Leatherneck in March 2012 that DynCorp was using a generic equipment billing code for the leased waste management vehicles. Id. ¶¶ 108-09. At the same time, DynCorp was allegedly billing the Army—using specific "Waste Management and Water Delivery services billing codes"—for the same services performed by subcontractors. Id. ¶ 113. Ms. Subhi later learned of this alleged double billing in early 2013. Id. ¶ 110.

According to the Amended Complaint, when DynCorp Project Management at Kandahar Air Field learned that an Administrative Contracting Officer was asking about the additional vehicles in the Spring of 2012, DynCorp attempted to conceal the fact that the vehicles were not being used "by directing workers to drive the vehicles around the bases to add miles to the odometers to make it look like the vehicles were being used." Id. ¶ 94. Allegedly, DynCorp management was aware of these efforts, as they were discussed in several conference calls in April or May of 2012. Id. ¶ 97. Plaintiffs also allege, however, that DynCorp was asked by the Administrative Contracting Officer about "all these vehicles sitting idle at all the bases and camps" and DynCorp responded that they were brought to Afghanistan so that DynCorp itself could perform waste management and water delivery services. See Id. ¶ 93.

The Amended Complaint recounts two instances of subcontractor workers driving the vehicles leased for self-performance by DynCorp in April or May 2012. Id. ¶¶ 98-100. It alleges that the subcontractor should have, but did not, reimburse DynCorp for use of the DynCorp-leased vehicles and that, ultimately,...