Bloomberg News

Gallup Accused of Overbilling U.S. on Polling Contracts

August 22, 2012

The Gallup Organization overbilled the U.S. on polling for federal agencies and promised a job to an official in charge of one of its contracts, according to a whistle-blower lawsuit joined by the Justice Department.

The former employee’s complaint, which in its first paragraph noted Gallup promotes itself as “the most trusted name in polling,” claims the company inflated the number of hours required to complete contracts with the State Department, the U.S. Mint and other agencies, causing more than $10 million in overpayments.

The Justice Department disclosed today it had intervened in the allegations involving the State Department and U.S. Mint contracts and said in court papers filed in federal court in Washington that it planned to add claims involving Gallup’s subcontract with the Federal Emergency Management Agency.

The FEMA claims involve whistle-blower allegations that Gallup offered employment to an agency official who was responsible for its subcontract while at the same time seeking additional funding, according to a Justice Department statement.

“Contractors who do business with the federal government must honor their obligations to provide honest services and products,” U.S. Attorney Ronald C. Machen said in a statement. “Working with relators and federal investigators, we will do all that we can to act against those who illegitimately bill the American taxpayers.” Relators is the legal term for whistle- blowers in False Claims lawsuits.

Sole-Source

Because the contract was granted on a sole-source basis, the government had no competing bids to evaluate the cost of work, according to the whistle-blower’s complaint.

In its proposed budget for the U.S. Mint project, aimed at identifying likely purchasers of newly issued coins and how to market to them, Gallup “inflated the number of hours required to complete the work, usually by a multiple of two or three times the number that would be justified by historical experience,” according to the complaint.

No one at Gallup was immediately available to comment on the lawsuit, according to Alyssa Brown, a spokeswoman for media inquiries on Gallup polls.

The suit was filed in 2009 by Michael Lindley, who was director of client services at Gallup from February 2008 until July 24, 2009. He says he was fired by the company after complaining to a supervisor that Gallup was violating the False Claims Act, according to Lindley’s complaint.

Closely held Gallup, which is headquartered in Washington, provides opinion polling and consulting services. It received more than $300 million in annual revenue in 2008, according to the complaint.

The case is U.S. ex rel. Lindley v. The Gallup Organization, 09-cv-01985, U.S. District Court, District of Columbia (Washington).

To contact the reporter on this story: Tom Schoenberg in Washington at tschoenberg@bloomberg.net.

To contact the editor responsible for this story: Michael Hytha at mhytha@bloomberg.net.


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