GE Aviation: Fuel Tanks, Drag Beams and Required Quality Controls

GE Aviation agreed to pay $6.58 million in its 2013 fuel tanks and drag beams settlement to resolve allegations of false claims involving manufacturing quality and inspection assurances. The Navy bought external fuel tanks for fighter jets, while the drag-beam allegations concerned components intended for Army helicopters and assurances made to another government contractor. For someone who knew the production or inspection work, the question was concrete: did the components and the work behind them match what GE represented?

The Justice Department announced the settlement on June 26, 2013. A former employee of GE’s Santa Ana facility brought a qui tam case that included allegations about misconduct at that plant.

The Fuel Tanks and the Failed Government Test

The fuel-tank allegations concerned 641 external fuel tanks GE delivered to the Navy between June 2005 and February 2008. GE manufactured them at its Santa Ana, California plant for use on the F/A-18 Hornet strike fighter. The government alleged that GE knowingly failed to comply with contract specifications and failed to undertake proper quality-control procedures for those deliveries.

In March 2008, a GE-manufactured tank failed government testing. That failure led to an investigation by the local California offices of the Defense Contract Management Agency, the Defense Contract Audit Agency, the Defense Criminal Investigative Service and the Navy Criminal Investigative Service.

The Navy contracted for components made under required controls, and the government’s allegations reached how GE produced them as well as what it delivered. We see the absurdity in that bargain: the buyer pays for the required quality controls, then has to investigate whether the supplier used them.

For a manufacturing or quality employee, this is where nonconforming defense products and testing assurances become specific. An insider may know exactly which deliveries an incomplete inspection or omitted control affected, even when the customer received an assurance that the work was complete.

The Drag Beams and the Complete-Inspection Claim

The drag-beam allegations concerned 228 components for Army UH-60 Black Hawk helicopters. The government alleged that, between June 2010 and June 2011, GE knowingly represented to another government contractor that it had completely inspected the beams and that they met all contract specifications. The inspection assurance was therefore a statement to the next contractor in the supply chain.

That statement made two promises: the inspection had been completed, and the components conformed. For an inspector, the first concerns work performed and recorded. For someone responsible for releasing the parts, the second concerns the basis for telling the customer that the shipment meets its requirements. We would examine what the inspection actually covered and how its results supported the statement made about those particular beams.

In a defense subcontracting chain, purchase orders and modifications connect suppliers to the contractors above them. A quality assurance made to an intermediate buyer can therefore matter to the government’s purchase farther along the chain.

GE’s tank and beam allegations put that distinction into practical terms. The tank contract called for manufacture and delivery to the Navy. The beam allegations concerned what GE told another contractor. For an employee at a supplier, the immediate customer’s order and the representation made to the customer are part of the connection we examine to government money.

The Government Bought the Quality Assurance, Too

Testing and certification records can influence both acceptance and payment for defense products. A test result describes what happened to a component, while the contract and acceptance records explain what the buyer required and accepted. The payment request connects the representation to the government’s bill. That is why a quality employee’s knowledge can carry financial significance beyond the laboratory or production floor.

The Defense Department’s inspector general describes the stakes in its Semiannual Report to the Congress, covering April through September 2018. Its product-substitution discussion explains why nonconforming products are a readiness and spending concern:

The Northrop Grumman and TRW satellite-parts case shows another way testing assurances reach a government purchase. In that separate settlement, the government alleged that TRW failed to test and qualify transistors properly, incorporated defective parts into National Reconnaissance Office satellite equipment and concealed reliability information.

The common concern is the information the buyer relied on. In GE’s beam allegations, that information was an assurance of complete inspection and conformity. In the satellite case, it concerned testing, qualification and reliability. An insider who knows the original result can explain what the purchasing or acceptance paperwork leaves out.

The Settlement and the Whistleblower’s Role

The GE Aviation settlement resolved the government’s tank and drag-beam allegations under the False Claims Act. A former Santa Ana employee brought the qui tam lawsuit, putting knowledge from inside the plant into a case about the government’s purchases.

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. The case shows why someone familiar with the work inside a manufacturing facility can have a role in pursuing false claims involving its products.

What Evidence Is Needed to Prove Fraud?

For a case involving inspection assurances, the useful evidence connects the specification, original inspection, delivered component and payment representation. A test result belongs with the production or lot it describes. An inspection record belongs beside the requirement it was supposed to satisfy and the statement made to the customer. We work with the insider to establish those connections, including what the company knew when it made the representation.

The contract and any modifications also matter because they define the work and the evidence supporting payment. For the tank allegations, the focus is the Navy’s specifications and required quality controls. For the beam allegations, it is the complete-inspection and conformity assurances to another contractor. Your knowledge may explain the gap between the work performed and the account the customer received. Our job is to connect that knowledge to the affected components, the company’s decisions and the government purchase.

You Know What the Inspection Covered

If you know which required checks were skipped or why a shipment’s inspection assurance overstated the work, talk with our whistleblower experts about the components and the customer promise. We build the case with you around the technical evidence and government purchase, bringing in defense contractor whistleblower lawyers who understand testing and manufacturing cases. We stay beside you as that knowledge becomes your strongest defense contractor whistleblower case.