Sikorsky Aircraft to pay $3.5 million to resolve allegations it overcharged Army for Black Hawk helicopter spare parts

WASHINGTON, 5 April 2014. Officials at helicopter maker Sikorsky Aircraft Corp. in Stratford, Conn., have agreed to settle a suit brought by U.S. government representatives alleging that the company charged inflated prices for spare parts used to maintain the U.S. Army’s current fleet of Black Hawk military helicopters. Sikorsky, part of United Technologies Corp., will pay $3.5 million, federal prosecutors say.

Deirdre M. Daly, United States attorney for the District of Connecticut, announced the civil settlement to resolve allegations that Sikorsky, a unit of United Technologies Corp. of Hartford, Conn., and manufacturer of Black Hawk helicopters and spare parts, violated the False Claims Act arising from the submission of inflated costs in the pricing of spare parts.

The government alleges that from 7 February 2008 through 8 September 2011, Sikorsky failed to disclose accurate, complete, and current cost and pricing data to the Army Aviation and Missile Life Cycle Management Command (AMCOM). AMCOM is one of the purchasing commands of the Army charged with purchasing spare parts for the Black Hawk.

“The Truth in Negotiations Act requires that contractors disclose accurate, complete and current cost and pricing data to the government during the negotiation process. When determining the prices to be charged to the government, Sikorsky failed to disclose that it had lower prices for certain parts. As a result, the government paid artificially excessive prices for those parts,” according to the U.S. Attorney’s Office, District of Connecticut.

The Black Hawk repair work was principally performed at the Corpus Christi Army Depot in Corpus Christi, Texas.

“In this era of shrinking defense budgets, it is particularly important to guard the public coffers and safeguard against the unnecessary expenditures of funds from American taxpayers,” U.S. Attorney Daly explains. “Failure to disclose accurate, complete and current cost and pricing data created an uneven playing field in the negotiation process which tilted unfairly in Sikorsky’s favor.”

“Unethical decisions and instances of fraud occurring within the Defense contractor community continue to burden the U.S. Defense budget and puts U.S. military readiness at a disadvantage,” states Craig W. Rupert, Special Agent in Charge, Defense Criminal Investigative Service (DCIS) Northeast Field Office. “With the current state of the economy, taxpayers can ill-afford to overpay for warfighter necessities required to carry out our Defense mission. This investigative effort and resulting settlement reflects DCIS’ commitment to safeguarding our military members and protecting the taxpayer’s interests by ensuring transparency and accountability in the Department of Defense procurement system.”

The investigation was conducted by the Defense Criminal Investigative Service, Defense Contract Audit Agency, Department of Defense Office of Inspector General-Audit Division, and the Defense Contract Management Agency. The investigation was led by Assistant U.S. Attorney Alan M. Soloway.

Paul Jackson, director of communications at Sikorsky Aircraft, has been quoted as saying that Sikorsky "is pleased to have reached an agreement to resolve this matter" and “looks forward to continuing to work closely with the Army to maintain its fleet of Black Hawk helicopters."

Images courtesy Sikorsky Aircraft Corp.