Lockheed Martin will pay Pentagon millions over F-35 overcharging allegations
WASHINGTON – The maker of the U.S. military's state-of-the-art stealth fighter jet agreed to pay nearly $30 million to settle allegations that it overcharged the Pentagon to produce and maintain the plane, the Justice Department announced Thursday.
The move comes as President Donald Trump says his multibillionaire aide Elon Musk is primed to find "billions" of dollars in Pentagon waste.
The Lockheed Martin Corporation, which received non-competitive contracts to produce the F-35 fighter, allegedly failed between 2013 and 2015 to disclose accurate cost information to the Defense Department's F-35 Joint Program Office during negotiations on five initial production contracts, according to the settlement agreement.
The government argued that the company violated the False Claims Act and the Truth in Negotiations Act, a 1962 law that requires government contractors seeking sole-source (or non-competitive) contracts to disclose all cost information they use to develop their pricing proposals.
The lawsuit, filed in 2017, spanned both Trump's first administration and that of former President Joe Biden.
The company, which currently receives more Pentagon contract money than any other in the world, previously paid $11.3 million to DoD 'for the same undisclosed cost and pricing data' covered by the settlement, the agreement said.
'Lockheed Martin is pleased to resolve this matter and avoid litigation,' said company spokesperson Cailin Schmeer in an emailed statement. 'We deny the False Claim Act allegations and any wrongdoing in the settlement.'
Government officials, however, celebrated the settlement as a victory for taxpayers.
'Those who do business with the government must do so fairly and honestly,' said Acting Assistant Attorney General Brett Shumate of the Justice Department's Civil Division in the release. 'We will pursue contractors that knowingly misuse taxpayer funds.'
Air Force Lt. Gen. Mike Schmidt, who heads the F-35 office, said the settlement shows the government 'will insist on integrity and honesty … We demand 100% accountability for every dollar spent on this program on behalf of U.S. taxpayers.'
According to the release, the lawsuit began as a 'qui tam' action, which allows whistleblowers to file lawsuits on behalf of the government against contractors accused of waste, fraud or abuse. Whistleblowers in 'qui tam' cases sometimes receive a significant portion of any money the government recovers from the contractor.
The portion of the F-35 settlement going to the whistleblower, former Lockheed Martin auditor Patrick Girard, "has not yet been determined," according to the release.
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