Military Contractor BAE Accused of Bilking Feds

     DETROIT (CN) – BAE Systems is once again under scrutiny by the U.S. government, less than five years after it was fined $400 million on bribery charges.
     The latest federal action accuses BAE Systems Tactical Vehicle Systems LP of lying back in 2008 about pricing information for a Family of Medium Tactical Vehicles (FMTV).
     With the Army having agreed to spend more than $2 billion on tactical trucks and trailers, BAE “knowingly concealed vendor quotations for 40 parts from various vendors that were lower than the quotations BAE had disclosed to the Army,” the June 18 complaint states.
     “The price of the contract would have been reduced by more than $20 million” if the company had disclosed accurate pricing information, the complaint continues.
     In addition to lying about the cost of certain parts, BAE also lied about the quantity of certain parts required for the order, the government says.
     “If BAE had disclosed the truth about the quantity of these parts, it would have reduced the contract price by approximately $12 million,” the complaint states.
     BAE additionally used incorrect labor rates when calculating the cost of the tactical vehicles, which added another $11 million to the total cost, the feds allege.
     The government seeks treble damages for violations of the False Claims and Truth-in-Negotiations Acts and unjust enrichment.
     It is represented by Benjamin Mizer, a Principal deputy assistant attorney general in Washington, D.C.
     BAE Systems was fined $400 million in 2010 after it pleaded guilty to violations of the Foreign Corrupt Practices Act for conduct between 2000 and 2002.
     According to a release by the Department of Justice, BAE “made a series of substantial payments to shell companies and third party intermediaries … [and] took steps to conceal … its undisclosed payments to them.”
     These payments totaled more than $200 million and were – at least in part – “used to ensure that BAES was favored in foreign government decisions regarding the purchase of defense articles,” the DOJ added.
     Its plea deal with the government also included the appointment of an independent compliance monitor to prevent future misconduct.
     The monitoring program was set to run through 2013, but it is uncertain whether the program uncovered the conduct at issue in the latest complaint.
     BAE Systems could not be reached for comment.

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