For eight years, the U.S. Department of Defense bought equipment from L3Harris Technologies to use in hands-free surveillance.
L3 was the government’s sole provider of receivers and transceivers used by the Navy, Army and Air Force “to operate unmanned vehicles and retrieve data and visuals for military operations and intelligence,” according to the Department of Justice.
But L3 wasn’t honest about the cost of the devices, the government alleged.
This month, the company agreed to pay a $62 million settlement — which includes $40 million in restitution — to resolve claims that it knowingly misled the government about pricing in its contracts.
The company is based in Florida, according to its website. But the division that provided the specific equipment in question — Communications System West — has offices in Utah.
The settlement is neither an admission of guilt, nor an affirmation of the government’s claims.
“L3Harris is pleased to have been able to amicably resolve the matter referenced in the DOJ’s announcement,” a spokesperson said in a statement. “This matter, which dates back to 2006-2014, has been resolved without any admission of fault or liability. We remain steadfast in our commitment to the integrity of the government procurement process and accurate cost and pricing data.”
The settlement puts to bed a years-long legal battle between L3 and the federal government. L3 has also sued the government twice for not letting it include “otherwise allowable costs” in its contract proposals and “forcing” L3 to undervalue its services.
Both of those cases were dismissed with prejudice, meaning they cannot be refiled.
The government’s case, meanwhile, alleged that L3 cherry-picked which details it included in its proposals and “knowingly submitted ... false claims” about pricing in its contracts, in violation of the Truth in Negotiations Act.
The law requires contractors to provide “the most current, complete and accurate facts that could reasonably be expected to affect price negotiations significantly.”
L3 failed to disclose the most recent and relevant data about labor, material and manufacturing expenses — which cost the government $40 million, the government claimed.
“Taking advantage of the resources that support the armed forces of the United States and other government agencies will not be tolerated,” Acting U. S. Attorney Felice John Viti said in a news release Thursday.
Her office, she added, “will continue to work with our law enforcement partners to investigate and hold accountable individuals and contractors who defraud the government.”
The devices L3 sold to the DOD are used for recording video, collecting data and and other intelligence operations. They included remote operations video enhanced receivers (known as ROVER), video-oriented transceivers for exchange of information (VORTEX), and soldier intelligence, surveillance, and reconnaissance (SIR) receivers.
The Department of Defense still has active contracts with L3, according to the DoD database. The most recent is for $8.9 million for program and technical management “in support of undersea warfare and surface warfare systems.” The contract “includes options which, if exercised, would bring the cumulative value ... to $46,677,661.”
Shannon Sollitt is a Report for America corps member covering business accountability and sustainability for The Salt Lake Tribune. Your donation to match our RFA grant helps keep her writing stories like this one; please consider making a tax-deductible gift of any amount today by clicking here.
