Deepwater whistle-blower case moves forward

A federal judge in Texas has decided to allow portions of a False Claims Act lawsuit to proceed against the Coast Guard’s Deepwater contractor, Integrated Coast Guard Systems.

The  decision was a ruling on a request made by Integrated Coast Guard Systems, which is a joint venture of Lockheed Martin Corp. and Northrop Grumman Corp., as well as on requests from Lockheed and Northrop separately, to dismiss the complaint brought by former Lockheed engineer Michael DeKort.

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DeKort’s lawsuit alleges that Lockheed and Northrop sought to defraud the government in the $26 billion Deepwater contract. DeKort filed the complaint under the whistle-blower provisions of the False Claims Act.

On April 5, District Judge Reed O’Connor, writing for the U.S. District Court in Dallas, agreed to dismiss a portion of the complaint, but he upheld the remainder of the complaint, allowing the lawsuit to move forward regarding several allegations of fraud, according to the court record.

The Coast Guard hired Lockheed and Northrop in 2002 as lead systems integrators for the Integrated Deepwater Systems asset modernization program. The acquisition involved a system-of-systems approach to updating the fleet, including a mix of cutters, patrol boats and aerial assets.

The Coast Guard rejected the first set of Deepwater patrol boats converted to 123-foot boats under the contract due to structural instability. The agency also took over as lead systems integrator in April 2007.

From July 2003 to February 2004, Lockheed employed DeKort as the Deepwater Lead Systems Engineer for the conversion of the 110-foot patrol boats to 123-foot patrol boats. Lockheed removed him as lead systems engineer in February 2004.

According to DeKort’s complaint, several flaws rendered the eight patrol boats noncompliant, including cables, video systems and equipment that was mounted improperly and exposed to the environment, and communications equipment that did not meet specifications.

Integrated Coast Guard Systems did not respond to a request for comment.