United Parcel Service (UPS) will pay $25 million to resolve allegations that it submitted false claims to the federal government in connection with its delivery of Next Day Air overnight packages.

The civil lawsuit was filed in federal court in Alexandria, Virginia by Robert K. Fulk, a former employee of UPS, who will receive $3.75 million.

Fulk was represented by Jonathan Alexander Cook of Wu Grohovsky & Whipple in Washington, D.C.

UPS was represented by Edmund Paul Power of King & Spalding in Washington, D.C.

UPS is a package delivery company based in Atlanta.

UPS provides delivery services to hundreds of federal agencies through contracts with the U.S. General Services Administration (GSA) and U.S. Transportation Command, which provides support to Department of Defense agencies.

Under these contracts, UPS guaranteed delivery of packages by certain specified times the following day.

The settlement resolves allegations that from 2004 to 2014, UPS engaged in practices that concealed its failure to comply with its delivery guarantees, thereby depriving federal customers of the ability to request refunds for the late delivery of packages.

In particular, the government alleged that UPS knowingly recorded inaccurate delivery times on packages to make it appear that the packages were delivered on time, applied inapplicable “exception codes” to excuse late delivery  — such as “security delay,” “customer not in,” or “business closed” —  and provided inaccurate “on-time” performance data under the federal contracts.

The civil settlement resolves a lawsuit filed under the whistleblower provision of the False Claims Act, which permits private parties to file suit on behalf of the United States for false claims and obtain a portion of the government’s recovery.