Lockheed Martin Space Systems, a Denver-based unit of Lockheed Martin Corporation, will pay $10.5 million to settle allegations that it submitted invoices for payment it was not entitled to receive on a multi-billion dollar contract connected to the Titan IV space launch vehicle program. After an October 2004 audit by the Defense Contract Audit Agency into the contract to provide launch vehicles and services for the Titan IV program, Lockheed conducted an internal audit and discovered that it should not have requested certain interim payments – known as progress payments – from the federal government. After Lockheed disclosed its findings to the government, an investigation determined that Lockheed was not entitled to millions of dollars of progress payments it received prematurely on the contract. The settlement figure represents approximately double the amount of interest Lockheed would have received by holding the premature payments. It’s reported that Lockheed obtained the excessive progress payments by manipulating its billings on the complicated contract in two ways.
The vast amount of fraud occurring in government contracts should be disturbing to all taxpayers. Unfortunately, when the fraud occurs it usually involves huge sums of money and that money comes directly or indirectly from U.S. taxpayers. I have often said – and I firmly believe – that repeat offenders who commit fraud in government contracts should be banned from all government programs for a specified time. After a second offense – the ban should be permanent.
Source: Corporate Crime Reporter
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