Boeing to pay $8.1M to resolve False Claims Act allegations on V-22 Osprey contracts

Sept. 28 (UPI) -- Arlington, Va., defense contractor Boeing has agree to pay $8.1 million dollars to settle allegations that it violated the False Claims Act in connection with contracts with the U.S. Navy to manufacture the V-22 Osprey.

In a statement released Thursday, the Department of Justice said the settlement resolves allegations that Boeing failed to comply with contractual manufacturing specifications when fabricating composite components for the V-22 at its facility in Ridley Park, Penn.

Boeing failed to perform required monthly testing on autoclaves used in the composite cure process, according to DOJ allegations, which also said Boeing was not in compliance with additional requirements related to the testing.

The False Claims Act is a vital litigation tool that imposes liability on people and companies that defraud U.S. government programs.

The testing failures on the V-22 Osprey, a tiltrotor military aircraft, took place from about 2007 to 2018, according to DOJ officials.

"The government expects contractors to adhere to contractual obligations to which they have agreed and for which they have been paid," said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division. "Today's settlement demonstrates our commitment to hold accountable contractors who violate such obligations and undermine the integrity of the government's procurement process."

The settlement was announced as part of DOJ's focus on accountability, Justice officials said in the statement.

"All government contractors have a responsibility to follow the obligations and protocols set forth by their contracts," said U.S. Attorney Jacqueline C. Romero for the Eastern District of Pennsylvania. "This office is committed to accountability and protection from false claims as shown in cases such as this."

Officials said the civil settlement includes resolving the claims brought under the qui tam, or whistleblower, provisions of the False Claims Act by ex-Boeing employees who worked in composites fabrication and autoclave operations for the V-22 program.

Under the whistleblower provisions, a private party can file an action on behalf of the U.S. government and receive a portion of any funds that are recovered.

"Maintaining the integrity of the U.S. Department of Defense supply chain is a top priority for the DoD Office of Inspector General's Defense Criminal Investigative Service," said special agent in charge Patrick J. Hegarty of the DCIS Northeast Field Office. "The DoD expects its contractors to adhere to contract specifications and provide quality products to the U.S. military. We are committed to working with our law enforcement partners to investigate allegations of contractors circumventing required testing protocols and submitting false claims during the DoD procurement process."

The resolution was the result of a coordinated effort between the Justice Department's Civil Division, Commercial Litigation Branch, Fraud Section, and the U.S. Attorney's Office for the Eastern District of Pennsylvania, officials said, adding that an array of other defense agencies participated.