False Claims Act lawsuit filed against Deepwater contractors

A whistleblower has filed a lawsuit alleging serious deficiencies in performance by the prime contractors for the $24 billion Deepwater procurement by the Coast Guard.

Former Lockheed Martin Corp. engineer Michael J. DeKort has filed a False Claims Act lawsuit against the prime contractors of the Coast Guard’s $24 billion Deepwater acquisition program.

DeKort filed the complaint against Integrated Coast Guard Systems — which is a joint venture of Lockheed Martin and Northrop Grumman Corp. — claiming a series of deficiencies by the contractors has led to major safety, security and national security problems with the acquisition program, according to a copy of the 60-page complaint distributed on the Web on June 1.

Northrop Grumman declined to comment. "It is out policy not to comment on matters of litigation," said Margaret Mitchell-Jones, a spokeswoman for Northrop Grumman Shipbuilding.

A Lockheed Martin spokesman today said the company would “vigorously defend” against the lawsuit.

“Lockheed Martin generally doesn’t comment on litigation,” said spokesman Kenneth Ross.. “However, in this case, we note that those allegations reflect on its performance of its subcontract for the 123-foot patrol boats. The allegations appear to be the same that he (DeKort) raised within Lockheed Martin. At that time, the allegations were repeatedly investigated by the corporation, including an investigation by the vice president of ethics and business conduct. In each case, the allegations were found to be without merit.”

DeKort has been a whistleblower on Deepwater since he left Lockheed Martin in 2004. At Lockheed, he worked on Deepwater’s command, control and communications systems.

He filed the complaint last week in the U.S. District Court for the Northern District of Texas, Dallas Division, and is seeking a jury trial. DeKort said he was the victim of retaliation after he reported problems with Deepwater, and he is seeking damages of $720 million along with civil penalties, legal costs and other relief in the lawsuit.

DeKort has been a longtime critic of the Deepwater program, which is the Coast Guard’s major asset-replacement program begun in 2001. Under Deepwater, the Coast Guard is building new assets including national security cutters and patrol boats. The initial design incorporated a systems approach in which some of the information technology on one type of boat also would be utilized on other boats.

The Coast Guard has acknowledged several significant problems with Deepwater. In 2007, the agency rejected eight new patrol boats due to structural problems with the hulls that rendered them unusable and sought a refund for approximately $96 million from Lockheed and Northrop. The Coast Guard took over as Lead Systems Integrator shortly afterward.

According to DeKort’s complaint, systemic deficiencies in the Deepwater program will hamper many critical systems on the boats being produced by the program and have resulted in a waste of taxpayer funds.

“ICGS’ corruption of Deepwater’s assets, cumulatively, will hamper every mission the USCG undertakes,” DeKort wrote in his complaint. “The corruptions or deficiencies have manifested themselves as a direct result of knowing, intentional and informed design and implementation choices made by ICGS. “

DeKort said he worked on ICGS’s program for Lockheed as the Deepwater Lead Systems Engineer for the patrol boats from July 2003 to February 2004.

“[DeKort] wanted to remain on the program, but was removed, because of apparent friction arising from his complaints to his direct management about ICGS’s concealed defects and its improper and shoddy work. Since then, [DeKort] has been pursuing various governmental and other channels while seeking a remedy for the ICGS’s corruption on the Integrated Deepwater System contract,” his complaint states.

DeKort said he personally observed shoddy practices in Deepwater command, control and communications equipment involving environmental survivability of the equipment, improper labeling of system cables, and failure to use low-smoke cables.

He said he learned from other managers of problems with shaft alignment and engine upgrades on the patrol boats.

DeKort also wrote in the complaint of problems with equipment failing to meet Tempest specifications for secure transmission of classified information.

The Coast Guard declined to comment on the lawsuit.

“It is inappropriate for the Coast Guard to comment on an ongoing civil lawsuit over which the Department of Justice has oversight. The Coast Guard continues to work with the Department of Justice and the Department of Homeland Security's Office of Inspector General on issues relating to the 123-foot patrol boats. All questions regarding the civil law suit should be addressed to the Department of Justice,” Coast Guard spokeswoman Laura Williams said in a statement today.

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