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By Nick Wakeman

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Nick Wakeman

Boeing's Insitu subsidiary pays $25M to settle False Claims charges

Insitu, a Boeing subsidiary that makes unmanned aircraft, has agreed to pay the federal government $25 million to settle charges that it tried to pass off used parts as new ones.

The settlement with the Justice Department resolves a False Claims Act lawsuit that alleged that Insitu submitted false cost and pricing data for contracts with U.S. Special Operations Command and the Navy.

“We expect companies that seek to do business with the government to provide complete and accurate information so contract prices can be negotiated on a level playing field,” said Acting Assistant Attorney General Jeffrey Bossert Clark.

The allegations involve seven contracts that the company won between Jan. 1, 2009 and Dec. 31, 2017. Both were awarded without competition.

The government charged in part that the Navy and SOCOM overpaid Insitu because they believed the parts would be new parts. But the company allegedly planned all along to use “less expensive recycled, refurbished, reconditioned, and/or reconfigured parts,” the Justice Department said.

The case started when former Insitu executive D. R. O’Hara filed a whistleblower lawsuit in federal court. DOJ then took over the case and O’Hara will receive $4.6 million out of the $25 million settlement.

In a statement to Washington Technology, Insitu said it cooperated in the Justice Department investigation. Insitu said it fulfilled the requirements of the contract.

“At all times, Insitu provided superior ISR services to the Navy and Special Operations Command (“SOCOM”), a fact the government does not dispute. Insitu continues to provide mission-ready systems and supports the nation’s warfighters by providing world-class service,” the company said.

The settlement only involves the allegations and “there has been no determination of liability,” DOJ said.

But clearly the government sees this as a victory and a warning to government contractors.

“Taxpayers deserve to get what they paid for -- especially in significant no-bid military contracts,” said U.S. Attorney Brian T. Moran. “Cases such as this one should be seen as a warning to defense contractors that false claims have no place in military purchasing.”

Posted by Nick Wakeman on Jan 13, 2021 at 10:45 AM


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