U.S. Attorney's Office
District of Massachusetts
May 13, 2025
BOSTON – NORESCO, LLC, a government contractor headquartered in Westborough, Mass., has agreed to a $9,585,141 settlement to resolve allegations that it violated the False Claims Act by overcharging numerous federal agencies for energy improvements in connection with 29 federally-funded energy savings performance contracts (ESPCs).
ESPCs allow federal agencies to procure energy savings and facility improvements with no up-front costs. Under the contracts, NORESCO obtained loans from banks and other financial entities to pay for the cost of installing a variety of energy savings upgrades in federal buildings worldwide. Following completion of the projects, the agencies then paid NORESCO in installments for cost of the projects, including any financing charges, using the energy savings that the projects created.
Today’s settlement resolves allegations that NORESCO overcharged the government in two ways. First, NORESCO inflated the price of one project for the United States Navy by including improper contingency costs. Specifically, after Navy contracting personnel partially rejected NORESCO’s request to include certain contingency costs in the price of the project, NORESCO instructed two of its subcontractors to add a total of $3.46 million to their sub-contractor bids to address potential unknown contingencies and did not disclose the inclusion of those additional contingency costs to the Navy. Shortly after becoming aware of the government’s investigation of this conduct, NORESCO refunded the contingency costs to the Navy project.
Second, NORESCO overcharged several federal agencies, including the Navy, for financing costs on a total of 29 energy savings projects. During the course of the government’s investigation of the Navy conduct, NORESCO self-disclosed that it had calculated the financing costs incorrectly over the life of several contracts. As a result, NORESCO inappropriately profited, or stood to profit, from the portion of project payments based on the incorrect financing costs. At the time of the self-disclosure, NORESCO calculated that it had improperly received an aggregate of $1,466,180 in excess payments and that, uncorrected, the projected excess financing costs would ultimately result in an aggregate overpayment of $5,645,655 on the 29 projects. NORESCO worked with the affected agencies to repay or credit the entire $5,645,655 across those 29 projects.
NORESCO cooperated with the government in this matter and voluntarily self-disclosed one issue. NORESCO has been credited for their cooperation under the Department of Justice’s guidelines for taking disclosure, cooperation and remediation into account in FCA cases. As part of the settlement, NORESCO acknowledged and accepted responsibility for the facts which form the basis of this settlement.
United States Attorney Leah B. Foley; Greg Gross, Special Agent in Charge of the Naval Criminal Investigative Service, Economic Crimes Field Office; Christopher Algieri, Special Agent in Charge of the U.S. Department of Veterans Affairs Office of Inspector General, Northeast Field Office; U.S. Department of Energy, Office of the Inspector General; Joseph Dattoria, Special Agent in Charge of the U.S. General Services Administration, Office of Inspector General, Northeast Field Investigations Division; U.S. Air Force, Office of Special Investigations; and Patrick J. Hegarty, Acting Special Agent in Charge of the Department of Defense’s Office of Inspector General’s Defense Criminal Investigative Service, Northeast Field Office made the announcement today.
The settlement announced today was the result of a coordinated effort between the U.S. Attorney’s Office for the District of Massachusetts. The matter was handled by Brian LaMacchia, Chief of the Affirmative Civil Enforcement Unit and the Justice Department’s Senior Trial Counsel Kelley Hauser.
Attachment
USA v. NORESCO - Settlement Agreement [PDF, 3 MB]
Source: U.S. Attorney's Office press release
