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Cambridge-based Draper agrees to repay government $3.5M for overcharging Navy

"Draper Lab’s overcharging on Navy contracts wasted valuable taxpayer money and undermined the integrity of the Department of the Navy’s procurement process."

Apollo 11 exhibit in the lobby of Draper Labs in Cambridge. Draper Labs overcharged the government in 2016 and is now agreeing to pay $3.5 million to the government. David L Ryan/Globe Staff


BOSTON (AP) — A Massachusetts-based nonprofit research company and defense contractor has agreed to pay nearly $3.5 million to resolve allegations that it improperly overcharged the federal government for some U.S. Navy contracts, federal prosecutors said Monday.

According to the agreement, an audit of Charles Stark Draper Laboratory Inc.‘s 2016 fiscal year costs charged to the government found, among other things, that Draper improperly billed the government for costs associated with internal projects called “opportunity investments,” the U.S. attorney’s office in Boston said in a statement.

Many of those projects were not of interest to the government, or Draper lacked sufficient documentation to justify the costs, prosecutors said.

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The audit also found that Cambridge-based Draper, which helps develop weapons systems for the Navy, lacked sufficient internal accounting controls regarding such projects, prosecutors said.

“Draper fully cooperated in the government’s investigation and is pleased that the matter has now been closed,” Draper said in an emailed statement.

The settlement protects taxpayer dollars, authorities said.

“Draper Lab’s overcharging on Navy contracts wasted valuable taxpayer money and undermined the integrity of the Department of the Navy’s procurement process,” Michael Wiest, special agent in charge of the Naval Criminal Investigative Service Northeast Field Office, said in a statement. “NCIS and our law enforcement partners remain committed to investigating contracting irregularities that diminish the operational readiness and warfighter superiority of the Navy and Marine Corps.”

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