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Military contractor settles claim it knowingly used cheap steel

A military contractor that manufactures helicopter landing systems for U.S. Navy destroyers has recently settled a claim that it knowingly substituted cheaper steel than the Navy contract specified but still billed for the contract amount. This violated the federal False Claims Act, according to the Justice Department. Indal Technologies, Inc., a division of the Curtiss-Wright Corporation, has agreed to pay $3.5 million to resolve the allegations.

Since the 1970s, Indal has been manufacturing the Recovery, Assist, Secure and Traverse (RAST) system, which allows helicopters to land on Arleigh-Burke-class Navy destroyers. When helicopters land on destroyers, it is often during high winds or rough seas. Therefore, once the helicopter lands, it is locked onto a trolley that moves it along a series of steel track plates to a shipboard hangar. According to the Navy's contract, these track plates must be made of HY100 steel, which is a stronger, corrosion-resistant steel.

According to the Justice Department, Indal knowingly substituted less-expensive steel in numerous RAST system tracks delivered to the Navy. This was done without notice or contract change.

The substitution was discovered by an investigation conducted by the Defense Contract Audit Agency and the Naval Criminal Investigative Service. The Justice Department's Civil Division and the U.S. Attorney's Office for the District of New Jersey coordinated the settlement. Indal has not been required to admit responsibility.

"When government contractors supply our armed forces with equipment that fails to meet performance standards, they not only cheat taxpayers, but they put at risk the safety of our service members," said the head of the Civil Division.

"American taxpayers are entitled to get what they pay for under government contracts, and that is especially true when the health and safety of U.S. armed forces are at stake," added the U.S. Attorney for New Jersey. "This Office will continue to pursue and hold accountable those who, like Indal, defraud the government by providing substandard goods and services in order to enrich themselves."

Fraud involving government contracts are often discovered by whistleblowers, and people who work in military contracting are often in a position to notice fraud, waste and abuse in these contracts. If you are considering blowing the whistle, you could earn a substantial reward if you do so under the qui tam provisions of the federal False Claims Act. Before you take any concrete steps, it's a good idea to protect your rights and your recovery by discussing the situation with a whistleblower law attorney.

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