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Washington DC Schools Food Vendor Settles Whistleblower Lawsuit for $19 Million

Jun 8, 2015

The largest food vendor for the Washington DC public schools has agreed to pay $19 million to settle a lawsuit alleging that the company overcharged the city and mismanaged the school meals programs.

The settlement is the result of a whistleblower lawsuit filed by a former director of food services for D.C. Public Schools against Chartwells and Thompson Hospitality, which provided food services for public schools in the District starting in 2008. The suit alleged that food often arrived at schools late, spoiled, or in short supply, the Washington Post reports.

Washington DC Attorney General Karl A. Racine said, "Chartwells has quite reasonably acknowledged and addressed mistakes it made in administering the contract to provide food and food services to DCPS," the Post reports. "It is important to ensure that contractors who receive District funds are held accountable for fulfilling their obligations under the contracts, and today’s settlement does just that."

Jeffrey Mills, who was executive director of the school system’s Office of Food and Nutritional Services from 2010 until he was fired in early 2013, brought the lawsuit. Mills was fired from his job after he reported mismanagement, fraud, and overfiling by one of the school system's largest contractors, according to the Post. (Mills settled a separate lawsuit with the school system for $450,000 last year, -alleging he was terminated for raising red flags about the food service contract.)

The settlement did not determine the validity of the original claims and it does not represent an admission of fact or liability by the contractor, according to the Post. Owen Donnelly, a spokesman for Chartwells said the company "denies any wrongdoing and has agreed to resolve the issues so that focus continues to be on nourishing the bodies, minds and spirits of students to pave the way for a lifetime of success and well-being." Donnelly said the underlying issues related to cost overruns and "related reconciliations," but asserted, "In our seven years at D.C. Public Schools, we have significantly increased the quality of food service while saving the District millions of dollars." The complaint from the Office of the Attorney General claimed that Chartwells "knowingly submitted" false invoices that the school system paid.

Chartwells entered into a contract in 2008 to provide food services that had formerly been provided in-house. Many students in the District in rely on the school nutrition program for meals. The goals of privatizing the service were to save money and improve the nutritional value of the food, the Post reports. Despite concerns, a new contract was signed in 2012.

The whistleblower–or "qui tam"–provisions of the D.C. False Claims Act allow private citizens to bring lawsuits on behalf of the District and to share in any recovery that is obtained. Mills could receive up to 30 percent of the settlement, but the amount has not been determined, according to the Post. Most of the money from the settlement will return to the District to pay back the amount they were overcharged.

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