On January 24, 2011 the Department of Justice announced that Lockheed Martin had agreed to pay $2 million to resolve allegations related to a 2009 qui tam whistleblower suit filed in Mississippi. The charges are complex and took some untangling. Here’s what we think happened.

In April 2004, the General Services Administration (GSA) awarded a task order to SAIC, which had teamed with LockMart and Applied Enterprise Solutions (AES) to provide support services to the National Center for Critical Information Processing and Storage (NCCIPS) at the Naval Oceanographic Major Shared Resource Center (NAVO MSRC), which was located at the Stennis Space Center in Mississippi. According to the DOJ, SAIC received $115 million under the task order, of which $2 million was paid to LockMart as a subcontractor.

Got all that? Let’s clarify: we are talking about a contract to provide support services at a Naval facility located at a NASA facility … awarded by a civilian agency. Yeah, that’s the kind of government logic that puzzles us as well.

Anyway, the suit alleged that—

… then government employees, Stephen Adamec and Robert Knesel, conspired with Lockheed Martin, Galloway, SAIC and AES to ensure that SAIC and its teaming partners were awarded the task order by (a) sharing non public, advance procurement information with the SAIC team that was not provided to other potential bidders; (b) sharing information about the solicitation with the SAIC team before providing that information to other bidders; and choosing a type of contract and putting language in the solicitation in order to bias the selection process to favor the SAIC team.

(We have no idea who “Galloway” is in the above paragraph, or what his role was.)

The qui tam suit, filed by David Magee (a former employee of NAVO MSRC), alleged that LockMart “caused the submission of false claims and conspired to submit such claims” when it invoiced the GSA for costs incurred on the tainted task order. This is not an uncommon assertion in such circumstances. Essentially, the government’s argument is that the contract was obtained by dishonest or fraudulent conduct, and thus any invoice under that contract is a false claim—subjecting the malefactor to treble damages plus up to $11,000 per invoice submitted.

In our view, that LockMart settled for an amount equal to its total billings (rather than treble damages) speaks to the difficulty of the prosecution’s arguments, and the perceived difficulty in making a jury understand the complexities of the case. In any case, Mr. Magee will receive $560,000 as his share of the government’s recovery. The DOJ did not report how much of that amount will go to Mr. Magee’s attorneys.