#505: 09-28-01: UNITED STATES INTERVENES IN LOCKHEED MARTIN CASE ALLEGING MISCHARGING ON GOVERNMENT CONTRACTS

FOR IMMEDIATE RELEASE

CIV

FRIDAY, SEPTEMBER 28, 2001
(202) 514-2007

WWW.USDOJ.GOV
TDD (202) 514-1888
UNITED STATES INTERVENES IN LOCKHEED MARTIN CASE ALLEGING MISCHARGING ON GOVERNMENT CONTRACTS

      WASHINGTON, D.C. - The United States has moved to intervene in a qui tam suit accusing Lockheed Martin Corporation of deliberately inflating the cost of a contract for the purchase of navigation and targeting pods for military jets, the Justice Department announced today.
     The suit was originally filed in U.S. 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. 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 alleged, among other things, that Lockheed Martin program management purposely hid a $40 million reserve in 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. In today's action, the United States has asked the court for permission to join the case against Lockheed Martin.
     The investigation of the allegations in the qui tam complaint was conducted by the U.S. Attorney's office in Orlando, Florida, the Department's Civil Division, the Defense Criminal Investigative Service, the Defense Contract Audit Agency and the Air Force Office of Special Investigations. 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. Under the False Claims Act, the United States may recover three times the amount of its losses plus civil penalties.

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