Boeing Coughs Up $8.1M Over V-22 Osprey False Claims

Boeing Company BA has agreed to pay $8.1 million to settle allegations that it violated the False Claims Act by submitting false claims and making false statements in connection with contracts with the U.S. Navy to manufacture the V-22 Osprey, a tiltrotor military aircraft. 

The settlement resolves allegations that from approximately 2007 through 2018, Boeing failed to comply with certain contractual manufacturing specifications in fabricating composite components for the V-22 at its facility in Ridley Park, Pennsylvania.

Specifically, the government contended that Boeing failed to perform required monthly testing on autoclaves used in the composite cure process and was not in compliance with additional requirements related to the testing.  

"Today's settlement demonstrates our commitment to hold accountable contractors who violate such obligations and undermine the integrity of the government's procurement process," said Principal Deputy Assistant Attorney General Brian M. Boynton, head of the Justice Department's Civil Division.

The lawsuit was filed under the qui tam or whistleblower provisions of the False Claims Act by former employees of Boeing who worked in composite fabrication and autoclave operations with the V-22 program. 

Under the qui tam provisions, a private party can file an action on behalf of the U.S. and receive a portion of any recovery. 

The Relators will receive $1.5 million in connection with the settlement.

"Maintaining the integrity of the U.S. Department of Defense (DoD) supply chain is a top priority for the DoD Office of Inspector General's Defense Criminal Investigative Service (DCIS)," said Special Agent in Charge Patrick J. Hegarty of the DCIS Northeast Field Office.

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Price Action: BA shares are trading higher by 0.66% at $191.68 in premarket trade on Friday.