Watchdog; Watchdog Blog

Court orders UTC to pay nearly $1 billion fine for F-16 jet engine overcharges

By |
Watchdog Blog,The Pentagon,Air Force,Kelly Cohen

Fourteen years after charges were first filed, federal contractor United Technologies Corporation has been ordered to pay almost $1 billion in misconduct fees to the government.

The original lawsuit from March 3, 1999, by the Department of Justice, accused UTC's Pratt & Whitney Division of overcharging the Air Force for jet engines by approximately $75 million. The contract was in force between 1985 and 1991.

The ruling against UTC by the U.S. District Court in Dayton, Ohio, came Aug. 1, 2008, after a bench trial lasted from October 2004 until April 2005. In the decision, the judge found in favor of the government, ordering Pratt to pay $7 million back - despite determining that the overcharges cost the government $228 million.

In November 2010, the U.S. Court of Appeals for the Sixth Circuit affirmed the original decision after both sides appealed, but ordered a reconsideration of damages.

Monday, a new decision was issued, ordering UTC pay the federal government $473 million, plus interest that has accrued since the 1980s. It is expected UTC will file an appeal.

Neil Gordon of the Project on Government Oversight, estimates that the total payment could be as much as $963 million. The court will issue a final amount July 1, according to Gordon.

Last year, UTC pleaded guilty to illegally giving military software to China, which cost them more than $75 million in a settlement and has a strong history of contracting misconduct with the federal government.

"UTC was the sixth largest federal contractor in fiscal year 2012. Most of its $8.3 billion in contracts that year were with the Pentagon," Gordon said. "POGO's Federal Contractor Misconduct Database shows UTC has 17 resolved misconduct instances and $931.8 million in misconduct penalties since 1995."

Go here for additional information from POGO.

View article comments Leave a comment