US shipbuilder Huntington Ingalls Industries Inc. has agreed to pay $9.2 million to settle a lawsuit alleging the shipbuilder knowingly overbilled the government for work on U.S. Navy and Coast Guard ships at its shipyards in Pascagoula, Mississippi.
The country’s only shipbuilder capable of building nuclear-powered aircraft carriers will make a payment of $7.9 million which, combined with earlier repayments, will result in the settlement recovery of approximately $9.2 million, according to a US Department of Justice announcement.
The civil settlement resolves alleged labor mischarging on various U.S. Navy and Coast Guard contracts dating back to 2003. HII allegedly mischarged labor incurred on particular contracts to other contracts, even though the costs were not actually incurred by those contracts.
The settlement also resolves claims disclosed by HII that it had billed the Navy and Coast Guard for dive operations to support ship hull construction that did not actually occur as claimed.
The labor mischarging allegations resolved by the settlement were originally raised in a lawsuit brought by Bryon Faulkner, a former HII employee, under the qui tam, or whistleblower, provisions of the False Claims Act (FCA), which permit private individuals to sue on behalf of the government for false claims and to share in any recovery.
Faulkner will receive $1,590,144 as a result of the civil action he filed.
“Contractors that knowingly bill the government in violation of contract terms will face serious consequences,” said acting assistant attorney general Chad A. Readler of the Justice Department’s civil division. “This settlement demonstrates, once again, that we will not tolerate defense contractors who falsely charge the armed forces or any agency of the United States.”