Catch of the Week: Tacoma foundry pays 10.8M settlement over deficient steel parts destined for U.S. Navy submarines, falsified tests
The latest in our Catch of the Week series features Bradken Inc.’s $10.8 million payment to resolve allegations that its Tacoma foundry violated the False Claims Act (“FCA”) when it produced and sold substandard steel parts for U.S. Navy submarines and falsified test results to hide the failures. Bradken and its former lab director Elaine Thomas also face criminal charges. The company accepted responsibility and agreed to take remedial measures in a deferred prosecution agreement.
Bradken, a major steel supplier for naval submarines, produces castings destined for submarine hulls. According to the Department of Justice, the Tacoma foundry produced castings that failed lab tests and did not meet the Navy’s standards for steel strength and toughness, which are designed to ensure that submarines can withstand circumstances like collisions. Court filings further allege that Thomas, former Bradken Director of Metallurgy, fabricated test results for over 200 steel productions, a significant portion of the castings Bradken sold to the Navy.
When a lab employee discovered testing discrepancies in 2017, the company disclosed the issue to the Navy. But Bradken then made misleading statements suggesting that the discrepancies were not the result of fraud. These representations impeded the Navy’s investigation and remediation efforts.
The Department of Justice’s press release highlighted the resulting risks to safety and naval operations: “Bradken placed the Navy’s sailors and its operations at risk. Further, after Bradken’s management discovered the falsified data, they misled the Navy about the scope and nature of the fraud. Government contractors must not tolerate fraud within their organizations, and they must be fully forthcoming with the government when they discover it,” said U.S. Attorney Brian T. Moran.
Company insiders or other individuals who learn of similar fraud and misconduct in government contracting can report it to the government and initiate a lawsuit on the government’s behalf under the FCA’s qui tam provisions. Successful whistleblowers are entitled to share in the government’s recovery.
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