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A Washington-based defense contractor has agreed to pay $3.3 million to settle allegations it rigged bids and inflated prices on contracts with the U.S. Department of Defense (DoD), federal prosecutors revealed Monday.

Berg Companies Inc., which manufactures rigid wall shelters, admitted it conspired with Boston-based prime contractor Noble Sales Co. and two other vendors in New Mexico and Florida to manipulate quotes for DoD purchases between 2019 and 2021. The scheme allegedly forced the military to pay excessive prices for shelters, according to the U.S. Department of Justice.

“Bid rigging of this type inhibits competition... creating the risk that the government is purchasing inferior products at exorbitant prices,” said Brett Shumate, assistant attorney general in the DOJ’s Civil Division.

The case, prosecuted under the False Claims Act, reveals a web of coordinated fraud in which Berg intentionally submitted inflated quotes, allowing its co-conspirators to win contracts at unjustifiably high prices—undermining competitive bidding requirements intended to protect taxpayer dollars.

Whistleblowers Trigger Investigation

The DOJ’s charges originated from a whistleblower lawsuit filed by Mark G. Davis, a U.S. Army veteran and former vendor salesperson, and Andrew G. Gunn, a U.K.-based company director. Under federal whistleblower provisions, they will receive $561,000 from the settlement for their role in exposing the fraud.

The scheme circumvented a key requirement: contracts valued at under $25,000 must be awarded after two competitive bids, while higher-value contracts require three independent quotes. The DOJ said that this process was “deliberately bypassed,” leading to military overpayments for Berg’s shelters.

Settlement Sends Strong Signal on Accountability

Though Berg was acquired by Hunter Defense Technologies Inc. in 2019 and has since changed ownership, the company cooperated with authorities. The U.S. Attorney’s Office in Massachusetts, which helped lead the probe, acknowledged Berg’s willingness to resolve the matter and accept responsibility.

“This settlement demonstrates our commitment to rooting out fraud, waste, and abuse involving taxpayer funds,” said U.S. Attorney Leah B. Foley. “We will also recognize when companies step up and cooperate.”

The DOJ confirmed that the remainder of the case remains under seal, and further enforcement action may be forthcoming.

Berg Companies and Hunter Defense Technologies did not immediately respond to requests for comment on Tuesday.