The Boeing Company to Pay $8.1 Million to Resolve False Claims Act Allegations

 The U.S. Justice Department released the below information:

The Boeing Company, headquartered in Arlington, Virginia, has agreed to pay $8,100,000 to resolve allegations that it violated the False Claims Act by submitting false claims and making false statements in connection with contracts with the U.S. Navy to manufacture the V-22 Osprey, a tiltrotor military aircraft. 

The settlement announced today resolves allegations that from approximately 2007 through 2018, Boeing failed to comply with certain contractual manufacturing specifications in fabricating composite components for the V-22 at its facility in Ridley Park, Pennsylvania. Specifically, the government contends that Boeing failed to perform required monthly testing on autoclaves used in the composite cure process and was not in compliance with additional requirements related to the testing.  

“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.”

“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.”

“Maintaining the integrity of the U.S. Department of Defense (DoD) supply chain is a top priority for the DoD Office of Inspector General’s Defense Criminal Investigative Service (DCIS),” 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 integrity of the military procurement process, and ultimately warfighter safety and our national security, demand that our contractors comply strictly with manufacturing requirements, including protocols for equipment testing,” said Special Agent in Charge Greg Gross of the Navy Criminal Investigative Service (NCIS) Economic Crimes Field Office. “NCIS and our partners remain committed to rooting out any noncompliance with manufacturing specifications that threatens warfighter readiness.”

The civil settlement includes the resolution of claims brought under the qui tam or whistleblower provisions of the False Claims Act by former employees of Boeing who worked in composites fabrication and autoclave operations with the V-22 program. Under the qui tam provisions, a private party can file an action on behalf of the United States and receive a portion of any recovery. The qui tam case is captioned U.S. ex rel. Roath et al. v. The Boeing Company, No. 16-cv-6547 (E.D. Pa.). The Relators will receive $1,539,000 in connection with the settlement.

The resolution obtained in this matter 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, with assistance from the DCIS, Naval Criminal Investigative Service, as well as subject matter experts from the Defense Contract Management Agency and the Naval Air Systems Command.

This matter was handled by Trial Attorney Amy Likoff of the Civil Division and Assistant U.S. Attorneys Joel Sweet and David Degnan for the Eastern District of Pennsylvania.

The claims resolved by the settlement are allegations only and there has been no determination of liability. 

Note: For many years, I performed security work as a civilian Defense Department employee for the Defense Contract Management Agency (DCMA) in Philadelphia.

DCMA oversaw the Boeing V-22 program, and I was a frequent visitor at Boeing’s Ridley Park, Pennsylvania facility outside of Philadelphia.