FOR IMMEDIATE RELEASE                                         CIV
MONDAY, APRIL 17, 1995                             (202) 616-2765
                                               TDD (202) 514-1888

   UNIVERSAL PROPULSION SETTLES CONTRACT DISPUTE FOR $1 MILLION


WASHINGTON, D.C. -- A Phoenix, Arizona, military contractor will
pay the United States $1 million to settle allegations it
overcharged the government for labor in manufacturing rocket
catapults used to eject Air Force pilots from aircraft, the
Department of Justice said today.
     Assistant Attorney General Frank Hunger, in charge of the
Civil Division, said the settlement resolves a complaint filed in
December 1993 and two amended complaints filed later against
Universal Propulsion Company, a division of Talley Industries.
     "The investigation of this case uncovered a deliberate
attempt by the contractor to withhold information from the
government to boost the cost of the contracts, a practice neither
the Department of Defense nor the Department of Justice will
tolerate," said Hunger.  "This settlement demonstrates the
resolve of both agencies to root out such fraud to make sure the
information requirements of the Truth in Negotiations Act are
fulfilled as required by law."
     According to the third amended complaint filed in U.S.
District Court in Phoenix, Universal Propulsion failed to
disclosure its known incurred labor on two contracts to produce
the CKU-5/A/A rocket catapults while negotiating with the Navy
Ships Parts Control Center of Mechanicsburg, Pa., in 1987 and
1988, then failed to disclose its known labor history to
Department of Defense analysts on a third contract.
     Universal Propulsion's failure to give the government the
information, which it was required to do under the Truth in
Negotiations Act, inflated the contract prices.  The company
manufactured approximately 1,800 of the devices valued at about
$4 million under these contracts.
     Hunger said the Defense Contract Audit Agency in Tempe,
Arizona, conducted audits before the case was filed and provided
audit assistance, while the Defense Criminal Investigative
Service in Phoenix investigated the matter before the Department
initiated its investigation, then provided investigation
assistance.  Both are Department of Defense agencies.
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