The False Claims Act was conceived in war. President Lincoln feared that the future of the Nation hung on stopping fraud against the Union Army, and decided to reward people who turned in the traitorous black-hearts who put Union soldiers at risk by delivering sawdust instead of bullets.
National defense is one of the largest federal expenditures – about $815 billion in FY 2015 alone – and is remains susceptible to fraudulent schemes.
Fraud against the military takes many forms. One important type of case involves what is often called “product substitution,” meaning that a contractor hired to make a product to specific requirements “substituted” a defective or nonconforming product. Morgan Verkamp’s lawyers and support staff have extensive experience in these cases. For example, in U.S. ex rel. Roby v. The Boeing Company, our client reported that Chinook helicopter transmission gears were defective and could fail in flight. The case settled for more than $60,000,000, and Boeing replaced many of the gears. In U.S. ex rel. LeFan v. General Electric Aircraft Engines, our six clients, who were union factory workers, blew the whistle on serious problems relating to the machining, welding, and inspection of mission-critical aircraft parts. In U.S. ex rel. Howard v. Lockheed Martin, we extensively litigated and settled claims relating to the manufacture of the F-22 stealth fighter. In U.S. ex rel. Hansson v. Conax, our team worked closely with the Government’s investigators to stop bad manufacturing practices and the use of improper electronics components in the manufacture of seat restraints used in the Space Shuttle. In U.S. ex rel. Gonter v. Hunt Valve Company, our clients reported horrifying manufacturing practices for nuclear submarine valves, changing those practices, recovering money, and sending two executives to federal prison.
Another area of significant military fraud is “misvouchering,” which occurs when a contractor improperly bills for work of fails to keep adequate records ensuring the quality of that work. We recently concluded a qui tam case in which our client alleged that a contractor in Afghanistan was paying civilian contractors for their days off, costing the government millions in improper overtime charges. U.S. ex rel. Lankford v. MPRI, Inc.
Many military procurements require extensive bid processes, or compliance with the Truth in Negotiations Act (“TINA”), or both. Many False Claims Act cases revolve around violations of these basic principles of fairness by government contractors. In 2014, we worked closely with the government to achieve a settlement of more than 400 million, with $100,000,000 to settle our client’s qui tam case, against the company which provided all the food and drinks for American troops in Afghanistan. U.S. ex rel. Epp v. Supreme Foodservice. Here’s a link to more information about that case.
We have substantial experience in cases relating to all sorts of military procurement contracts.
If you believe that you are aware of any fraud related to military procurement, contact us to schedule a prompt and confidential discussion of your information.