Lockheed Martin subsidiaries reach $70 million settlement for claims they overcharged Navy for parts

News

Lockheed Martin subsidiaries reach $70 million settlement for claims they overcharged Navy for parts

2024-06-22 08:34 Last Updated At：08:40

STRATFORD, Conn. (AP) — Two Lockheed Martin subsidiaries have agreed to pay the federal government $70 million for overcharging the Navy for aircraft parts, the U.S. Department of Justice announced Friday.

The federal agency says Sikorsky Support Services, based in Stratford, Connecticut, and Derco Aerospace, headquartered in Milwaukee, Wisconsin, knowingly entered into an improper subcontract for spare parts and materials for aircrafts used to train Navy pilots.

Under the contract, Sikorsky purchased the parts from Derco at the cost Derco paid other suppliers, plus a 32% markup.

Sikorsky then billed the Navy for the price it paid Derco, in violation of federal regulations barring such arrangements, which prosecutors said drive up government costs.

“Today’s settlement demonstrates that the Justice Department will ensure that government contractors do not skirt the law and engage in self-dealing that may artificially inflate their charges at the expense of the American taxpayers," Brian Boynton, head of the DOJ's civil division, said in a statement.

Lockheed Martin, based in Maryland, said in a statement Friday that it is “pleased that the settlement will bring this case to a conclusion,” noting that there also was no finding of wrongdoing by Sikorsky or Derco Aerospace.

Prosecutors said the settlement resolves a lawsuit filed by a former employee of Derco under the whistleblower provision of the federal False Claims Act. The case goes back to 2011, or several years before Lockheed Martin acquired Sikorsky, the maker of the military's Black Hawk helicopters, in 2015.

Darrin Jones, of the U.S. Department of Defense's Office of Inspector General, said the settlement should serve as a deterrent for those looking to exploit the agency's procurement process.

“Overinflation of parts and material costs for the repair and maintenance of aircraft affected naval air training and is a disservice to the American taxpayer,” added Greg Gross, of the Naval Criminal Investigative Service's Economic Crimes Field Office.

Spain says it will meet NATO's defense spending goal of 2% of GDP this year

2025-04-22 23:38 Last Updated At：23:41

MADRID (AP) — Spain will meet NATO's defense spending target this year, Spanish Prime Minister Pedro Sánchez said Tuesday, as pressure grows on the eurozone's fourth-largest economy to boost its military expenditure.

Sánchez said the government will raise defense spending by 10.5 billion euros ($12 billion) to reach NATO's target of 2% of GDP. The spending will go toward telecommunications, cybersecurity and buying military equipment, he said, as well as raising salaries and adding troops.

Spain spent the least of all NATO members last year on defense as a share of GDP. It previously committed to reaching the 2% target by 2029. But it has come under pressure for not spending enough amid a widening chasm in the transatlantic alliance as the Trump administration says its security priorities lie elsewhere.

U.S. President Donald Trump has repeatedly taken European allies to task for not spending enough on their own defense and has pushed NATO allies to raise defense spending to as much as 5% of GDP.

While European allies consider Trump's 5% target to be unrealistic, NATO leaders are expected to set a fresh spending target at the military alliance's next summit this summer in The Hague. NATO Secretary General Mark Rutte has said the new goal should be “north of 3%.

Facing what he called a “changing era," Sánchez on Tuesday said that it was time for Spain to “take control of our own destiny” and contribute to Europe's rearmament.

“If you asked me years ago about my government's investment priorities in security and defense, it's obvious my response would have been different,” Sánchez said. “That's not because our values have changed ... it's because the world has.”

The Socialist leader heads a minority government with hard-left coalition partners that oppose defense and military increases. Sánchez said his plan to boost defense spending would not go through Parliament.

Besides Spain, seven of NATO's 32 member countries still spend less than 2% of GDP on their defense budgets. They are Belgium, Canada, Croatia, Italy, Luxembourg, Portugal and Slovenia.