The famed manufacturer of the Sikorsky Black Hawk helicopter, Sikorsky Aircraft, has agreed to pay $3.5 million to settle claims it overcharged the U.S. government for services and parts for the powerful utility aircraft. The settlement occurred following a lawsuit filed under the qui tam provisions of the False Claims Act, which permits private individuals bring claims of fraud against government contractors on behalf of the government. Those who are successful in their False Claims Act cases can receive up to 30 percent of the final settlement or verdict amount.
Details of False Claims Committed by Sikorsky Aircraft
The lawsuit against Sikorsky Aircraft alleges various cases of overbilling between 2008 and 2011 with regard to repairs and parts for the Black Hawk aircraft, which has been in use by the U.S. Army since 1972 and is used by all branches of the U.S. military and several other nations. Specifically, the lawsuit asserts that during this time, Sikorsky Aircraft (a division of United Technologies, Corp.) failed to alert the Army’s purchasing unit that it could obtain replacement parts for the Black Hawk at a reduced price and continued to charge the U.S. government inflated prices for parts necessary to operate the aircraft. While a detailed list of replacement parts was not made available at the time of settlement, reports reveal that Sikorsky overcharged the government for everything from nuts and bolts to replacement doors.
The settlement agreement was finalized on March 26, despite Sikorsky’s assertion that the government’s allegations were “not well-founded.” The case was investigated by several federal agencies, including the Defense Criminal Investigative Service. An agent for DCIS recently stated:
“Unethical decisions and instances of fraud occurring within the defense contractor community continue to burden the U.S. defense budget and puts U.S. military readiness at a disadvantage….”
The U.S. Attorney handling the case also noted that:
“In this era of shrinking defense budgets, it is particularly important to guard the public coffers and safeguard against the unnecessary expenditures of funds from American taxpayers….Failure to disclose accurate, complete, and current cost and pricing data created an uneven playing field in the negotiation process which tilted unfairly in Sikorsky’s favor.”
In 2013, Sikorsky Aircraft reported $6.3 billion in sales and $594 million in operating profits. Its parent company, United Technologies, is enduring several other contract disputes with the U.S. government, including allegations of unlawful charges for overhead costs and overpayments for the Pratt & Whitney F100 military engine.
Sikorsky settled another Black Hawk-related False Claims Act case with the U.S. government just a few years ago involving a breach of contract terms involving the requirement to test certain components of the aircraft for safety during combat. Specifically, Sikorsky agreed to install armored panels surrounding the cockpit that had been ballistically tested to withstand battle. From 1991 to 2006, Sikorsky obtained armored panels from a distributor in California that did not test the panels for durability in combat-like conditions. As a result, Sikorsky agreed to pay $2.9 million to settle the matter.
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