May 24, 2023
The Department of Justice announced that Utah-based government contractor Communication Systems West, also known as L3 Technologies, Inc. (L3), has settled a False Claims Act case for $21.8 million. According to the press release, the company knowingly submitted false claims to the Department of Defense by including the cost of certain parts twice in their contract proposals.
L3 specializes in manufacturing cables, receivers, and communications equipment used in unmanned aircraft vehicles for military operations and intelligence purposes. The company holds sole source, fixed price prime contracts with the Air Force, Army, Navy, and other government agencies. It also has subcontracts with prime contractors involved in unmanned aircraft vehicle manufacturing.
Between 2008 and 2011, L3 submitted numerous contract proposals for two communication devices used in military systems: the Remote Operations Video Enhanced Receiver (ROVER) and the Video Oriented Transceiver for Exchange of Information (VORTEX). These devices provide real-time, full-motion video and critical data from the battlefield.
According to the DOJ, L3 included “Proratables” as part of the “Material Additive Factor” in government contracts. Proratables are materials consumed in the production of a product or the provision of a service, including low-value common parts like nuts, bolts, and screws. Then, L3 routinely identified these same parts as individual charges on the bill of materials. This resulted in double-charging the government for these parts.
“The U.S. Attorney’s Office is committed to protecting the integrity of federal procurement contracting,” said U.S. Attorney Trina A. Higgins for the District of Utah. “We will vigorously pursue federal contractors who fail to comply with the highest standards of accuracy to ensure federal agencies are appropriately charged for goods and services.”
As a result of the settlement, L3 will pay the United States a total of $21,811,248, including $14,939,211 in restitution.
The Whistleblower Law Collaborative LLC represents clients nationwide in bringing actions under state and federal False Claims Acts. If you have knowledge of Defense Contractor Fraud, we encourage you to contact us for a free and confidential consultation.