ALABAMA-based, Austal USA has agreed to pay US$811,259 to settle claims that it knowingly supplied equipment that did not meet military specifications.
The claims which were investigated by Defense Criminal Investigative Service (DCIS), Navy Criminal Investigative Service (NCIS) and the Defense Contract Audit Agency’s Office of Investigative Support alleges that, under a 2011 Navy contract, Austal invoiced for military grade high performance butterfly valves and triple offset butterfly valves it installed on five Littoral Combat Ship hulls when it knew the valves had not met the testing requirements to be deemed military grade.
The claims were allegations only and Austal was not found to be liable.
A media release from the US Attorney’s Office, Southern District of Mississippi, said Austal had agreed to pay US$811,259 to resolve allegations that it violated the False Claims Act by knowingly supplying valves that did not meet military specifications.
Austal manufactures numerous ships for the United States, including the Independence Class Littoral Combat Ship (LCS).
Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department’s Civil Division said it was essential to the safety and operational readiness of the Navy fleet that contractors comply with applicable military specifications.
“We will continue to hold accountable those who knowingly supply equipment to the U.S. military that fails to meet contract specifications,” Mr Boynton said.
His comments were backed by US Attorney Todd W. Gee for the Southern District of Mississippi who said they would not tolerate companies who cut corners and misrepresent the products they provide to the military,
“This office is committed to protecting taxpayer dollars and will pursue fraud wherever we find it.”
“Supplying nonconforming parts to the Department of Defense (DoD) compromises military systems and potentially endangers the lives of US service members,” said Special Agent in Charge Darrin K. Jones of DoD Office of Inspector General, Defense Criminal Investigative Service (DCIS), Southeast Field Office. “DCIS and our law enforcement partners are fully committed to ensure the safety of our military personnel and protecting the integrity of the DoD supply chain.”
“Product substitution risks degrading warfighter capability and wastes U.S. taxpayer dollars,” said Special Agent in Charge Greg Gross of the Navy Criminal Investigative Service (NCIS) Economic Crimes Field Office. “I want to thank our investigative partners for their collaboration in working with NCIS to protect the integrity of the Department of the Navy procurement process.”
