Lockheed Martin pays up

Lockheed Martin is to pay the US government $37,900,000 to resolve allegations that it inflated the cost of performing several Air Force contracts.

The case was originally filed in the US District Court in Orlando, FL by a former employee of Lockheed Martin, Albert Campbell, under the ‘whistleblower’ provisions of the US False Claims Act.

The suit accused Lockheed Martin of deliberately inflating the cost of four contracts for the purchase of navigation and targeting pods for military jets. Campbell’s complaint alleged that Lockheed Martin violated the Act by knowingly failing, among other things, to provide current, accurate and complete cost and pricing data to US Air Force contract negotiators. The complaint also alleged mischarging of costs on a fifth Air Force contract.

The US government intervened and took over litigation of the case as it related to one of the contracts. The United States’ complaint alleged, among other things, that Lockheed Martin program management purposely inflated its contract proposal for a foreign military sales contract under the LANTIRN (Low Altitude Navigation and Targeting Infrared for Night) program to create additional profit which could be used to offset overruns on another Air Force contract. The Air Force entered into the contract with Lockheed Martin to purchase the LANTIRN pods for resale to the governments of Saudi Arabia, Greece and Bahrain.

The settlement resolves Lockheed Martin’s potential liability under the US False Claims Act arising from both Campbell’s complaint and that of the United States government. Under the whistleblower statute, a private party, known as a ‘relator,’ can file an action on behalf of the US and receive a portion of the recovery.

Campbell will receive $8,750,000 as his share of the proceeds of the settlement.