Metal foundry and metal casting company Bradken Inc. has agreed to pay $10.9 million to resolve a government claim of military contractor fraud for falsely representing the specifications on vessel components sold to the Navy.

The company did not admit wrongdoing but instead agreed to settle the case to put an end to the civil claims and escape further legal action. Bradken is also facing criminal fraud charges stemming from the allegations, according to the Department of Justice (DOJ).

Department of Justice officials said the settlement is part of effective efforts to hold companies accountable for defrauding the government and abusing taxpayer dollars.

The DOJ had accused a Bradken employee of knowingly falsifying test results “to conceal the fact that the components did not meet the Navy’s specifications.”

This deception put military service members at risk for physical injury by making Navy vessels possibly unreliable or unable to perform as intended, according to Assistant Attorney General Jody Hunt of the DOJ’s Civil Division.

Charles P. King, Special Agent in Charge, NCIS Northwest Field Office, echoed Hunt’s concerns about the safety risks of specification risks not being met. He explained that “the success of the [Department of the Navy’s] warfighting ability is dependent upon a sound and reliable acquisition process.”

King said that the “settlement demonstrates the commitment of [US government agencies] to hold companies accountable for supplying substandard products, especially products that could impact the Department of the Navy’s warfighting ability and battlefield superiority, and the safety of our Sailors and Marines.”

The government had argued that Bradken’s processes were not capable of identifying that the test results had been falsely represented. The government claimed that Bradken charged shipbuilders for specific grades of high yield steel but delivered a lower quality product.

Military Contractor Fraud

In addition to the $10.9 million settlement, Bradken has agreed to enter into a deferred prosecution agreement to resolve the criminal fraud charges. The company will admit to the government’s allegations and implement remedial actions. If Bradken complies with the government’s requirements, the criminal charges will be dismissed in three years.

Recently, the federal government brought a class action lawsuit against another company for allegedly providing substandard products to members of the military. Stars and Stripes reported that Minnesota-based 3M Company is accused of selling faulty earplugs to the US military, resulting in hearing damage to service members who wore them. 

In July 2018, 3M settled with the Justice Department for $9.1 million but continues to face individual claims from people who say that their hearing was affected by the earplugs. These claims were largely brought forward after the Justice Department settlement was reached, according to Stars and Stripes.

The 3M claims were brought by a whistleblower. Federal law provides a process for private citizens to file lawsuits on behalf of the government against federal contractors who are committing fraud.  

This article is not legal advice. It is presented
for informational purposes only.