Top U.S. defense contractor L3 Tech to pay $62M to settle claims of deceptive practices
May 22 (UPI) -- American defense contractor L3 Technologies Inc. will pay tens of millions of dollars in fines to settle allegations that one of its divisions, Communications System West, submitted false business info to U.S. military and other federal agencies, the U.S. Justice Department announced Thursday.
L3, doing business in Utah, agreed to pay $62 million to the U.S. government to settle scores of allegations that Communications System West had violated multiple provisions in federal law by "knowingly" making false claims, according to a settlement agreement.
"Taking advantage of the resources that support the armed forces of the United States and other government agencies will not be tolerated," said Utah's Acting U.S. Attorney Felice John Viti.
At the end of 2018, L3 Technologies and Harris Corp. announced its merger that created the country's sixth largest defense contractor.
U.S. officials say L3 company leaders knowingly made false statements and submitted other claims for "dozens" of government contract proposals by not accurately disclosing L3's current and complete set of cost and pricing data for communication devices sold to a number of departments and agencies, including the U.S. Army, Navy and Air Force.
Viti said his office will continue to work and partner with law enforcement agencies to investigate and "hold accountable individuals and contractors who defraud the government."
L3 produces communications equipment designed to operate unmanned vehicles, retrieve data and other visuals for U.S. military ops and intelligence, DOJ added.
The Justice Department contends that the practice went on from October 2006 to at least February 2014.
It said L3 Tech allegedly violated provisions in the 1863 False Claims Act, amended in 1986 under the Reagan administration, and the 1962 Truth In Negotiations Act which requires a federal contractor to provide the most current and accurate facts to government regulators by the time there's an agreement, which could "reasonably be expected to affect price negotiations significantly."
"Investigating companies that defraud the Army is crucial to maintaining the trust of the American public and upholding the integrity of government contracting," said Special Agent in Charge Olga Morales of the U.S. Army's CID southwest field office.
In 2020, L3Harris Technologies was selected to design and manufacture a next-gen aerial device in a nearly $500 million contract, and the company started the year with a $28 million DOD contract to update Greek F-16 jets. The year prior, L3 was on the receiving end for more than $37 million to produce U.S. Navy precision aiming lasers and $73 million to repair U.S. Navy submarine issues in 2019.
OSI Special Agent Jeffery Herrin said the $62 million settlement underscored the "commitment" the Air Force Office of Special Investigations has to protect national security and "ensuring the integrity of Department of Defense acquisitions."
"L3's defective pricing in contract proposals for critical systems like ROVER, VORTEX and SIR erodes public trust," he continued, saying with "robust" law enforcement alliances that "law and order" will be upheld in the U.S. defense industry.
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