Charles River contracts with the National Institutes of Health (NIH) to develop, maintain, and distribute colonies of animals to the NIH.
The company told us in a statement that it initiated the investigation into “inaccurate billing with respect to certain government contracts” in May 2013, with the assistance of the law firm of Davis Polk & Wardwell LLP.
The issue was reported to the company’s senior management by a Charles River employee, at which point the matter was reprted to “relevant government contracting officers,” including the Department of Health and Human Services’ Office of the Inspector General, and the Department of Justice.
“We cooperated with these agencies to ensure the proper repayment and resolution of this matter,” the statement explained.
According to the company, the investigation confirmed that its Research Models and Services (RMS) business segment overbilled the Department of Health and Human Services, “for certain work performed with respect to a small subset of our government contracts.”
“Based on the findings of the investigation and confirmation that this overbilling was confined to a limited amount of work performed at two of our research model facilities, we were able to cooperatively resolve this matter to the government’s full satisfaction.”
US Department of Justice release
According to the release from the US Department of Justice, employees at Charles River’s Raleigh, North Carolina and Kingston, New York facilities billed NIH for labor and associated costs – “despite the fact these individuals did not render the services as Charles River had claimed.”
“Charles River’s self-disclosure and resolution of this matter underscores the importance of contractors preventing, detecting, and remediating overcharges of labor costs to HHS,” Chief Counsel to the Inspector General, HHS-OIG, Gregory E. Demske, said.
“Under our contractor self-disclosure program, OIG is committed to working with HHS contractors that detect fraud issues to review, take any appropriate action, and resolve these matters fairly.”
NIH told us in a statement that it "takes these matters seriously and has a well-established process for reviewing and collaborating with law enforcement to address fraud, waste, or abuse."
"This NIH process, which is a component of NIH oversight of federal funds, was key in reporting these excessive charges. It is extremely important for grantee and contracted institutions to adhere to federal requirements and to maintain the financial integrity of federally funded research."