Boeing settles whistleblower suit
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The Boeing Co., the world's largest combined manufacturer of commercial jets and military aircraft, has agreed to pay nearly $4.4 million to settle a whistleblower lawsuit in which the company was alleged to have submitted inflated bills to the U.S. government for work related to the Chinook Helicopter Program performed at Boeing's plant near Philadelphia.
And the man who blew the whistle may take home $813,000.
The Federal False Claims Act settlement was made official Dec. 23 and the docket was unsealed on Jan. 17. A settlement approval hearing is set for Feb. 27.
According to court documents, the U.S. Department of Defense, beginning in 2003, awarded contracts to Boeing to build and modify Chinook helicopters.
The Defense Department ordered more than 100 new helicopters from Boeing, in addition to renovations to several hundred older helicopters on which the company agreed to perform extensive modifications, according to court documents.
Under the government contracts, Boeing is paid a flat rate for "basic" work -- standard work necessary to upgrade every helicopter, which accounts for the vast majority of the work performed on the Chinooks -- and an hourly rate for "over-and-above" work, which consists of special repairs, according to court documents.
Usually, according to court documents, Boeing bills the government for over-and-above work based on an estimate of how long the repairs will take. About 30 percent of the time, the government and Boeing are unable to reach an agreement on an estimate and the over-and-above work is instead billed based on Boeing employees' reports of how long the repairs actually took.
In February 2010, whistleblower plaintiff Vincent A. DiMezza Jr., a Boeing employee, filed a suit alleging Boeing employees had submitted bills to the government for over-and-above work when they had really only done basic work, according to court documents. Following an investigation, the U.S. government determined that between 2005 and the present, several Boeing mechanics performed "basic" work while "badged-in" for over-and-above work, and several first-line managers instructed them to do so.
Boeing denies the allegations.
First Published January 30, 2012 12:00 am