Feds Charge BAE Systems Unit with False Claims

The Justice Department has filed a complaint against BAE Systems Tactical Vehicle Systems LP (BAE) for knowingly overcharging the Army for materials under a military truck contract.

BAE is a subsidiary of BAE Systems Inc., headquartered in Arlington, Virginia, which is owned by BAE Systems plc, a global defense, security and aerospace company headquartered in London.  BAE is located in Sealy, Texas.


In 2008, the Army Tactical Command Life Cycle Management Command, in Warren, Michigan, awarded BAE a contract to build more than 20,000 trucks for the military, known as Family of Medium Tactical Vehicles (FMTVs).

Government procurement law requires contractors negotiating government contracts above a threshold price, to disclose cost or pricing data relevant to the negotiations.

The purpose of requiring a contractor to disclose this information is to put the government on equal footing with the contractor and ensure a fair and reasonable price.

The government alleges that BAE knowingly inflated the price of the FMTV contract by concealing cost and pricing data on numerous parts and materials during contract negotiations, despite having certified that the data it had disclosed was accurate, complete and current.

“We expect government contractors to act with integrity when they fulfill their contractual obligations to the government,” said U.S. Attorney Kenneth Magidson of the Southern District of Texas.  “Breach of that trust results in being held accountable in court.”

The government’s complaint alleges claims under the Truth-in-Negotiations Act, which requires the truthful disclosure of cost or pricing data, and the False Claims Act, which prohibits knowingly submitting false claims for federal funds.

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