An $11 Million Settlement Will Resolve Allegations that ITT Cannon Violated False Claims Act

by Andrew Murray | July 25th, 2019

On July 16, 2019, the Department of Justice announced that the defense contractor ITT Cannon has agreed to pay $11 million to settle allegations that it sold the military untested electrical connectors. The Press Release states:

 ITT Cannon has agreed to pay the United States $11 million to settle False Claims Act allegations that it supplied electrical connectors to the military that had not been properly tested, the Justice Department announced today. ITT sold the untested connectors both directly to the Government and through distributors and other government contractors which incorporated them into technology and equipment sold to the Government.

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The settlement resolves allegations that from September 2008 to March 21, 2017, ITT did not conduct the required periodic testing on six models of electrical connectors. In December 2010, the Government learned that ITT had not done this testing and ITT promised the Government that it would conduct remedial testing and report the result to the Government. Shortly thereafter, in February 2011, ITT experienced several failures in its remedial testing. ITT did not immediately disclose these failures but represented to the Government that it was merely behind in the remedial testing.

In March 2017, the Defense Logistics Agency (DLA) issued an order stopping the shipment of the six connectors. In June 2017, ITT issued six Government Industry Data Exchange Program notices (GIDEP) disclosing to industry its failure to conduct required testing, its test failures, and changes in the processes, materials, construction, sourcing and design of the connectors. DLA then removed the six ITT connectors from the Qualified Products List (QPL). The QPL lists products that have met the qualification requirements set forth in the applicable Military Specifications (Mil Specs), which are uniform engineering and technical requirements for certain products used by the Department of Defense. DLA’s removal of ITT from the QPL precluded ITT from selling parts to the military covered by the Mil Specs. Recently, ITT has requalified one of the connectors for sale to the Government.

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The Government announced that the whistleblower, a former regional quality manager at the company, will receive $2,090,000 (a 19% relator’s share).

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