U.S. Files Intervenes In FCA Case Against Defense Contractors

Posted: 10/20/2014  browse the blog archive
U.S. Files Intervenes In FCA Case Against Defense Contractors

The federal government has elected to intervene in a False Claims Act lawsuit against Sikorsky Aircraft Corporation and two of its subsidiaries, Sikorsky Support Services and Derco Aerospace Inc., the U.S. Department of Justice announced last week.  Sikorsky Aircraft Corporation is a wholly owned subsidiary of United Technologies Corporation.

The government’s complaint alleges that Sikorsky Aircraft Corporation approved an illegal cost-plus-a-percentage-of-cost subcontract between Sikorsky Support Services Inc., and Derco Aerospace.  A cost-plus-a-percentage-of-cost contract is one where the cost of performance is unknown in advance and compensation is determined based on the cost of performance plus an agreed-to percentage of such costs.  Such contracts are prohibited because they give contractors no incentive to control the cost of performance.  The complaint further alleges the defendants used this illegal subcontract to overcharge the Navy on parts and materials that were used to maintain Navy aircraft.

The lawsuit was originally filed by Mary J. Patzer, a former employee of Derco, under the whistleblower provision of the False Claims Act.  The Act allows private parties with knowledge of fraud against the government to sue on behalf of the government and share in the recovery.  The government may also intervene in the case, as it has elected to do here.

The Chanler Group, in association with the Hirst Law Group, represents whistleblowers who take action under the False Claims Act to report fraud committed against the federal and state governments.  We have years of experience representing whistleblower clients who expose every kind of fraud against the government, including health care fraud, contract fraud, and tax fraud.  Read more about our expertise in False Claims Act cases and how you can take action.