Item 1.01. Entry into a Material Definitive Agreement.
On July 21, 2023, Booz Allen Hamilton Holding Corporation (the “Company”) entered into a Settlement Agreement (the “Settlement Agreement”) with the United States of America, acting through the United States Department of Justice (the “DOJ”) and on behalf of the Defense Contract Management Agency (collectively, the “United States”), to resolve the previously disclosed civil investigation related to certain elements of the Company's cost accounting and indirect cost charging practices from April 1, 2011 through March 31, 2021 (the “Covered Conduct”).
Under the terms of the Settlement Agreement, the Company has agreed to pay to the United States $377.5 million (the “Settlement Amount”), which the Company expects to pay with cash on hand and by drawing on its revolving credit facility. The Company had previously recorded a $350.0 million reserve relating to this investigation and had previously disclosed that it believed the range of reasonably possible loss in connection with the investigation to be between $350 million and $378 million. Upon the United States’ receipt of the Settlement Amount, the United States will release the Company from any civil or administrative monetary claims for the Covered Conduct under the civil False Claims Act and other specified civil statutes and common law theories of liability.
The Company entered into the Settlement Agreement to avoid the delay, uncertainty and expense of protracted litigation. The Settlement Agreement contains no admission of liability by the Company.
Forward Looking Statements
This report contains, or may be deemed to contain, “forward-looking statements” (as defined in the U.S. Private Securities Litigation Reform Act of 1995). These statements express Booz Allen’s current expectation of future events or its future performance and do not relate directly to historical or current events. As such, Booz Allen’s future actions and related results may vary from any expectations or goals expressed in, or implied by, the forward-looking statements included in this report, possibly to a material degree. Booz Allen can offer no assurance that the assumptions made in preparing any of the forward-looking statements will prove accurate or that any long-term goals will be realized. All forward-looking statements included in this report speak only as of the date made, and, except as required by law, Booz Allen undertakes no obligation to update or revise publicly any such forward-looking statements, whether as a result of new information, future events, or otherwise.