Sierra Nevada Company, LLC has agreed to pay $7.75 million to resolve False Claims Act allegations that it employed a Department of War official who used his government position to steer contracts to the company while he was simultaneously on its payroll, the U.S. Attorney's Office for the Eastern District of Virginia announced July 28, 2026.
Background
Sierra Nevada Company, LLC (SNC), headquartered in Sparks, Nevada, is a defense contractor that supplies products and services to the Department of War and other federal agencies. The settlement resolves civil allegations that SNC violated the False Claims Act by knowingly making false statements about the absence of an organizational conflict of interest in order to induce the government to award it contracts.
At the center of the case is Michael Henry, who worked as a civilian employee for the Department of War's Joint Staff, Directorate for Command, Control, Communications, and Computers/Cyber, known as J6. From July 2019 to June 2020, SNC retained Henry as a paid consultant while he remained employed by the federal government in that role. The Federal Acquisition Regulation requires contractors to disclose and avoid organizational conflicts of interest that could compromise the integrity of the procurement process. An organizational conflict of interest arises whenever a contractor's outside relationships or activities could impair its objectivity, or give it an unfair competitive advantage, in a government acquisition. Contracting officers rely on contractor self-certifications to identify and mitigate those conflicts before award, which is why the government treats a false OCI certification as a direct hit on the integrity of the procurement itself. DOJ alleged that SNC's arrangement with Henry created exactly that kind of conflict, and that the company certified otherwise to win contract awards.
Key Details
According to the U.S. Attorney's Office, Henry "participated personally and substantially" in three separate government contracts awarded to SNC during the period he was simultaneously employed by the company and the government. Those contracts were an Army subcontract awarded in 2019, a General Services Administration indefinite quantity/indefinite delivery contract awarded in 2020, and task orders issued under a 2018 U.S. Special Operations Command indefinite delivery, indefinite quantity contract.
DOJ's account describes a dual role in which Henry, in his capacity as a Joint Staff/J6 employee, evaluated and approved SNC's products for government use, while at the same time, as SNC's paid consultant, he recommended those same products for purchase. That overlap is what prosecutors characterized as an organizational conflict of interest under the FAR — a government official positioned to influence procurement decisions in favor of a company that was paying him.
The civil settlement follows a related criminal case against Henry himself. In 2025, Henry pled guilty to a one-count criminal indictment charging him with acts affecting a personal financial interest, a charge tied to his conduct while working for both SNC and the government.
The case was investigated jointly by the Defense Criminal Investigative Service, the Army Criminal Investigation Division's Fraud Field Office, and the General Services Administration's Office of Inspector General. Both the DoD Office of Inspector General and the GSA Office of Inspector General separately confirmed the settlement in statements posted July 28, 2026. That three-agency investigative team reflects how the alleged conflict touched contracting activity overseen by the Army, GSA, and the broader Joint Staff, requiring investigators with visibility into each of those acquisition streams to piece together the full pattern of Henry's dual role. As with most FCA settlements, the resolution reflects allegations only, and there has been no determination of civil liability against SNC.
What It Means for Contractors
The SNC settlement is a reminder that organizational conflict of interest violations carry real financial exposure even when the underlying contract performance itself is not at issue. The government's theory here did not depend on defective products or unfulfilled deliverables — it turned entirely on who influenced the award decisions and whether that influence was disclosed. Contractors that hire current or recently departed government personnel, particularly those with any role touching evaluation, testing, or approval of the contractor's own products, need documented screening processes before those hires are onboarded, not after a whistleblower or IG referral surfaces the arrangement.
The case also illustrates how quickly a compliance gap in one hire can cascade across multiple contract vehicles. Henry's alleged influence touched an Army subcontract, a GSA IDIQ, and SOCOM task orders — three separate acquisition channels tied to a single undisclosed relationship. Companies with employees who hold parallel or recent government roles should audit whether those individuals have any nexus to contracts the company is pursuing or performing, across every agency relationship, not just the one where the hire originated.
FAR-required OCI certifications are not paperwork exercises. DOJ's theory in this case was that SNC's certifications about the nonexistence of a conflict were false, which is what triggered False Claims Act liability rather than a narrower contract dispute. Contractors should treat OCI certifications with the same rigor as cost or pricing certifications, with legal or compliance sign-off before submission, especially when a consultant or advisor has any current or recent government affiliation.
The joint investigation by DCIS, Army CID, and GSA OIG also signals that conflict-of-interest cases are being pursued with multi-agency coordination when a contractor's work spans service branches and civilian agencies. Contractors operating across DoD components and GSA schedules should expect that an OCI issue identified by one agency's inspector general can quickly draw in investigators from every agency touched by the same personnel arrangement.
Finally, the pairing of a civil FCA settlement with a separate criminal guilty plea against the individual official underscores that companies cannot treat OCI exposure as a purely corporate matter. Henry faced his own criminal indictment independent of SNC's civil resolution, meaning the individuals involved in a conflicted arrangement carry personal legal risk on top of whatever liability their employer negotiates. Compliance teams should make clear to employees who move between government and industry roles, or who retain consultants with recent government service, that both the company and the individual can face separate government action arising from the same facts.
