Huntington Ingalls Indus. pays $9.2 million to settle cost mischarging case

by Ben Vernia | September 5th, 2017

On August 15, the Department of Justice announced that Virginia-based Huntington Ingalls Industries had agreed to pay a total of $9.2 million to settle allegations, originally brought by a qui tam whistleblower, that the company submitted false claims for labor costs associated with refurbishing Navy and Coast Guard vessels. According to DOJ’s press release:

Huntington Ingalls Industries Inc. (HII), a publicly traded company headquartered in Newport, Virginia, has agreed to a $9.2 million settlement of allegations that it violated the False Claims Act by knowingly overbilling the government for labor on U.S. Navy and Coast Guard ships at its shipyards in Pascagoula, Mississippi. Under the settlement, HII will make a payment of $7.9 million which, combined with earlier repayments, will result in the settlement recovery of approximately $9.2 million.

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The civil settlement resolves alleged labor mischarging on various U.S. Navy and Coast Guard contracts dating back to 2003. HII allegedly mischarged labor incurred on particular contracts to other contracts, even though the costs were not actually incurred by those contracts. The settlement also resolves claims disclosed by HII that it had billed the Navy and Coast Guard for dive operations to support ship hull construction that did not actually occur as claimed.

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The Government also announced that the whistleblower,  a former Huntington Ingalls employee, will receive $1,590,144 of the settlement (a relator’s share of about 17.3%).

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