L3 Technologies Inc., a corporation doing business in Utah, has agreed to pay the United States $62 million to settle allegations that its division, Communications System West, violated the False Claims Act and the Truth In Negotiations Act by knowingly making false statements and submitting and causing the submission of false claims by failing to disclose accurate, current, and complete cost or pricing data for communications equipment sold to various Department of Defense agencies, including the Air Force, Army, and Navy, and other government agencies.
L3 manufactures communications equipment to operate unmanned vehicles and retrieve data and visuals for military operations and intelligence. The devices are known as remote operations video enhanced receivers, Video-Oriented Transceivers for Exchange of Information, and Soldier Intelligence, Surveillance, and Reconnaissance receivers.
The United States has purchased ROVER, VORTEX, and SIR products through sole-source, fixed-price contracts, and L3 has also supplied these products under subcontracts with other prime contractors who manufacture unmanned vehicles.
The settlement resolves allegations that, between October 2006 and February 2014, L3 failed to disclose accurate, complete, and current cost or pricing data relating to the labor, material, and other costs for manufacturing the ROVER, VORTEX, and SIR products, and each of their versions and kits, and falsely certified that it had done so in dozens of government contract proposals.
The United States alleged that this conduct violated the Truth in Negotiations Act, which requires a contractor to provide the government, at the time of an agreement on price, the most current, complete, and accurate facts that could reasonably be expected to affect price negotiations significantly.
The United States further alleged that, by failing to disclose accurate, complete, and current cost or pricing data, L3 knowingly submitted or caused the submission of false claims in connection with the ROVER, VORTEX, and SIR contracts and subcontracts in violation of the False Claims Act.
“This $62 million settlement underscores the Air Force Office of Special Investigations (OSI) commitment to protecting national security and ensuring the integrity of Department of Defense acquisitions,” stated OSI Special Agent Jeffery T.E. Herrin. “L3’s defective pricing in contract proposals for critical systems like ROVER, VORTEX, and SIR erodes public trust, and OSI, through robust law enforcement partnerships, will continue to uphold law and order within the defence industry.”
