FOR IMMEDIATE RELEASE
MONDAY, OCTOBER 5, 1998
TDD (202) 514-1888
U.S. SUES NORTHROP-GRUMMAN UNDER PROVISIONS OF
THE FALSE CLAIMS ACT
WASHINGTON, D.C. - The United States has partially intervened in an action accusing Northrop-Grumman of failing to properly heat treat thousands of aluminum aircraft replacement parts used in refurbishing aircraft, the Department of Justice announced today.
The suit, filed in U.S. District Court in Lake Charles, Louisiana, was filed by two private parties under the qui tam provisions of the False Claims Act, said Assistant Attorney General Frank Hunger of the Civil Division.
The complaint, which was unsealed on September 25, alleges that Northrop-Grumman violated the False Claims Act by knowingly submitting invoices for work that was not properly performed, namely using furnaces that were not calibrated or tested in accordance with the contract requirements for heat treating parts. Heat treatment is a process used to strengthen aluminum parts.
The complaint also alleges that Northrop-Grumman improperly overcharged time spent in making certain repairs, purchased certain uncertified replacement parts, and failed to follow proper procedures in making repairs. However, the government has not joined in these allegations.
Northrop-Grumman provided the Air Force with a study that estimated that, over a two year period, approximately 5,000 parts were heat-treated in ovens that had not been properly calibrated or tested. After determining that Northrop-Grumman's failure to properly heat treat certain parts did not present a safety of flight risk, the Air Force decided not to remove those affected parts already installed on the aircraft. The Air Force does, however, expect to incur additional costs in inspecting the affected parts once the aircraft are in use, and it may need to replace the parts earlier than scheduled.
Under the qui tam statute, a private party, known as the "relator", can file an action on behalf of the United States and receive a portion of the recovery. The case remained under seal while the relators' allegations were investigated by the U.S. to determine whether to intervene in the case and prosecute the action.
Under the False Claims Act, the U.S. may recover three times the amount of the its losses plus civil penalties.