A lawsuit filed against Austal USA claims the company, while building ships for the military, knowingly overbilled the federal government for work. It’s alleged that Austal misrepresented the rank and work hours of employees to sustain defense contracts for its Mobile River shipyard. The lawsuit was filed by four former employees, who sued as whistleblowers on behalf of the U.S. government. The Plaintiffs – William Gates, Clinton Roundtree, James Trainer and Tami Andrews – allege that Austal violated the False Claims Act. The suit, filed in June 2014, as required by law was kept under a seal. One of the original Plaintiffs, Hannah Christopher, filed for voluntary dismissal from the suit soon after it was filed.
U.S. District Judge Callie Ginny Granade ordered on March 2 the case be unsealed, allowing Austal to be served a copy of the complaint. The allegations focus mainly on several instances when the former employees say they witnessed the fraudulent acts. It should be noted that lawsuits filed under the False Claims Act require Plaintiffs to first file suit with the federal government before it is served to the defendant. The government does an investigation to determine if it will join the suit.
In her order, Judge Granade said the U.S. Attorney’s Office “declined to intervene” at this time. However, acting Assistant U.S. Attorney Joyce R. Branda had requested in a February court filing to be notified if the Plaintiffs “or any Defendant propose that this action be dismissed, settled, or otherwise discontinued, this Court solicit the written consent of the United States before ruling or granting its approval.”
The lawsuit alleges that Austal “knowingly presented and falsified data reflecting employee rank and work hours to the U.S. Navy in order to win and maintain lucrative contracts for the construction of marine vessels at its facility in the Port of Mobile. Austal currently builds two types of aluminum ships for the U.S. Navy’s billion dollar joint high speed vessel and the littoral combat ship programs. The shipyard employs as many as 4,000 workers, according to company officials. The company first started building marine vessels for commercial clients, and did so until 2006 when it contracted, along with General Dynamics, to construct the USS Independence, the first littoral combat ship.
Funded by the Navy as a research vessel, the littoral combat ship program was red-flagged for cost overruns and construction issues. Austal later became the prime contractor, together with Lockheed Martin, with each company building two different versions of the littoral combat ship. The 10-ship inventory of littoral combat ships is worth $3.6 billion. The contract for the joint high speed program is worth $1.6 billion.
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