UNITED STATES ANNOUNCES SETTLEMENT OF LOCKHEED MARTIN CASE
ALLEGING MISCHARGING ON GOVERNMENT CONTRACTS

WASHINGTON, D.C. - The United States announced today a settlement with Lockheed Martin Corporation. Lockheed Martin will pay the United States $37,900,000 to resolve allegations that it inflated the cost of performing several Air Force contracts.

The case was originally filed in the United States District Court in Orlando, Florida by a former employee of Lockheed Martin, Albert Campbell, under the qui tam or whistleblower provisions of the False Claims Act. The qui tam suit accused Lockheed Martin of deliberately inflating the cost of four contracts for the purchase of navigation and targeting pods for military jets. Campbell's complaint alleged that Lockheed Martin violated the Act by knowingly failing, among other things, to provide current, accurate and complete cost and pricing data to Air Force contract negotiators. Government contractors are required by the Truth in Negotiations Act to provide accurate and complete cost data to government contract negotiators. The complaint also alleged mischarging of costs on a fifth Air Force contract.

In announcing the settlement, Assistant Attorney General Peter Keisler stated, “Companies which do business with the United States must deal honestly with the government. The Department of Justice will vigorously prosecute cases under the False Claims Act against those contractors who deliberately overcharge Government agencies.”

The United States intervened and took over litigation of the case as it related to one of the contracts. The United States' complaint alleged, among other things, that Lockheed Martin program management purposely inflated its contract proposal for a foreign military sales contract under the LANTIRN (Low Altitude Navigation and Targeting Infrared for Night) program in order to create additional profit which could be used to offset overruns on another Air Force contract. The Air Force entered into the contract with Lockheed Martin to purchase the LANTIRN pods for resale to the governments of Saudi Arabia, Greece and Bahrain.

The settlement resolves Lockheed Martin's potential liability under the False Claims Act arising from both Campbell's complaint and that of the United States. Under the qui tam statute, a private party, known as a "relator," can file an action on behalf of the United States and receive a portion of the recovery. Campbell will receive $8,750,000 as his share of the proceeds of the settlement.

The litigation and settlement of the case were conducted by the U.S. Attorney's office in Orlando, Florida, and the Department's Civil Division, with the assistance of the Defense Criminal Investigative Service and the Defense Contract Audit Agency.

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