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XPO pays US$10 million penalty in Pentagon 'overcharging' case
GLOBAL supply chain services provider XPO Logistics will pay US$10 million of a $13 million settlement with the US Department of Justice (DoJ) over alleged inflated invoices within a massive US military contract, claims denied by the company.
The company, together with Estes Forwarding Worldwide and Estes Express Lines jointly entered into the settlement agreement with the US DoJ to settle a civil investigation in which it was alleged by two whistleblowers that Menlo Logistics, acquired last year by XPO, had engaged in overcharging the US military, reported Lloyd's Loading List.
XPO stressed that it had inherited the previously disclosed civil investigation of services provided during the Defence Transportation Coordination Initiative (DTCI) programme when it acquired Con-way Inc, the parent company of Menlo Logistics, in October 2015.
In a joint statement, the three companies said: "The settlement fully resolves disputed charges under the logistics contract. The companies strenuously denied that any wrongdoing occurred. Under the settlement, the allegations against XPO, EFW and Estes have been dismissed with prejudice, waived and released."
According to the US news service Transport Topics, Menlo Worldwide Government Services won the $1.7 billion contract to move US Defence Department freight in 2007, an agreement that was described at the time as the largest defence logistics outsourcing contract in US history.
Estes, through its Estes Forwarding Worldwide business, will pay $3 million for its role as subcontractor, according to documents provided to Transport Topics by an attorney for the two whistleblowers, who filed a complaint in 2013 about the contract.
It said the settlement agreement chronicles seven different ways in which the US was alleged to have been overcharged between August 2007 and April 2016, although the total amount of the alleged overcharges is not listed in the 25-page settlement agreement.
The two whistleblowers will receive $2.86 million from the settlement, Transport Topics reported.
The company, together with Estes Forwarding Worldwide and Estes Express Lines jointly entered into the settlement agreement with the US DoJ to settle a civil investigation in which it was alleged by two whistleblowers that Menlo Logistics, acquired last year by XPO, had engaged in overcharging the US military, reported Lloyd's Loading List.
XPO stressed that it had inherited the previously disclosed civil investigation of services provided during the Defence Transportation Coordination Initiative (DTCI) programme when it acquired Con-way Inc, the parent company of Menlo Logistics, in October 2015.
In a joint statement, the three companies said: "The settlement fully resolves disputed charges under the logistics contract. The companies strenuously denied that any wrongdoing occurred. Under the settlement, the allegations against XPO, EFW and Estes have been dismissed with prejudice, waived and released."
According to the US news service Transport Topics, Menlo Worldwide Government Services won the $1.7 billion contract to move US Defence Department freight in 2007, an agreement that was described at the time as the largest defence logistics outsourcing contract in US history.
Estes, through its Estes Forwarding Worldwide business, will pay $3 million for its role as subcontractor, according to documents provided to Transport Topics by an attorney for the two whistleblowers, who filed a complaint in 2013 about the contract.
It said the settlement agreement chronicles seven different ways in which the US was alleged to have been overcharged between August 2007 and April 2016, although the total amount of the alleged overcharges is not listed in the 25-page settlement agreement.
The two whistleblowers will receive $2.86 million from the settlement, Transport Topics reported.
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