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Court says United Technologies liable for damages in fighter jet contract
Question of the Day
A federal court has found United Technologies Corp. liable for more than $473 million in damages and penalties arising out of a contract to provide the Air Force with engines for F-15 and F-16 fighter aircraft from 1985 to 1990, the Justice Department said Thursday.
Documents filed in U.S. District Court for the Southern District of Ohio calculating the damages in an already-decided lawsuit say that United Technologies's proposed prices for the engines misrepresented how the company calculated those prices, resulting in the government paying hundreds of millions more than it otherwise would have.
Specifically, the government says United Technologies failed to include in its price proposal historical discounts that it received from suppliers, and instead knowingly used outdated information that excluded such discounts.
"It is vital that companies who do business with the government provide full and accurate information, and if they do not, they will pay the consequences," said Acting Assistant Attorney General Stuart Delery, who heads the Justice Department's Civil Division.
United Technologies, which is based in Connecticut, provides a broad range of high-technology products and services to the global aerospace and building systems industries.
The government filed a lawsuit against United Technologies in 1999 under the False Claims Act and the common law, and those claims were tried, without a jury, in 2004. An initial decision by the district court in 2008 found the company liable under the False Claims Act, but did not award any damages. The district court also dismissed the government's common law claims.
That decision was appealed by both the government and the company. In 2010, the 6th U.S. Circuit Court of Appeals affirmed the district court's finding that United Technologies was liable under the False Claims Act, but reversed and remanded the case to the district court to recalculate the government's damages and to reconsider the government's common-law claims.
Mr. Delery said the district court awarded the government False Claims Act damages and penalties of $364 million, which is the highest recovery obtained by the government in a case tried under the act. He said the court also awarded an additional $109 million in damages on the common law claims.
With the addition of prejudgment interest on the latter claims, which the court has yet to calculate, the government anticipates that the total judgment against United Technologies could be well in excess of half a billion dollars.
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