US Sues Defense Contractor for Inflating Costs in Army Truck Contract

The US government is suing US subsidiary of the global defense company BAE Systems for overcharging the US Army for materials in a military truck contract, the US Department of Justice (DOJ) said in a statement on Friday.

WASHINGTON (Sputnik) — The US Army and BAE agreed to a contract for more than 20,000 military trucks in 2008. Under US law, government contractors are required to release cost or pricing data relevant to the contractual agreement.

The government is alleging BAE inflated that cost and knowingly falsified claims in violation of two US laws.

“The United States has filed a complaint against BAE Systems Tactical Vehicle Systems LP (BAE) for knowingly overcharging the Army for materials under a military truck contract,” the Justice Department said.

United Kingdom-based BAE Systems is one of the world’s largest defense contractors. The company has been implicated in multiple corruption and fraud scandals spanning the United States, Europe, Africa and the Middle East.

“The government alleges that BAE knowingly inflated the price of the FMTV [truck] contract by concealing cost and pricing data on numerous parts and materials during contract negotiations, despite having certified that the data it had disclosed was accurate, complete and current,” the statement said.

Commenting on the lawsuit, US Attorney Barbara McQuade of the Eastern District of Michigan said BAE’s alleged conduct is “akin to charging $600 for a hammer.”

In 2010, BAE Systems pleaded guilty in the US and agreed to pay $400 million in criminal fines on multiple charges related to arms sales, corruption and fraud.