Booz Allen Hamilton Holding Corp. (BAH) has reached a settlement agreement of $377.5 million with the US Justice Department, bringing an end to a previously disclosed investigation into the government contractor’s past charging practices.
The investigation focused on specific aspects of the company’s cost accounting and indirect cost charging practices, spanning from April 2011 to March 2021, according to a filing made by Booz Allen. The settlement amount will be paid by the company using its available cash reserves and drawing on its revolving credit facility.
To cover potential losses resulting from the investigation, Booz Allen had already set aside $350 million in reserves. The expected loss was estimated to fall between $350 million and $378 million. However, by entering into the settlement agreement, the company intends to avoid the potential drawbacks of prolonged litigation. It should be noted that the agreement does not imply any admission of liability on the part of Booz Allen.
The news had no immediate impact on Booz Allen’s stock price, as shares remained unchanged during the extended trading session following a 0.4% decline in regular trading hours.
Conclusion
Booz Allen Hamilton Holding Corp. has concluded its settlement with the US Justice Department, putting an end to the investigation surrounding the company’s past charging practices. Despite the financial implications, Booz Allen aims to move past this chapter swiftly by avoiding protracted litigation.