MK Battery, East Penn, NPC and BAE Systems: The Alleged Design Change Behind the Humvee Batteries

The MK Battery, East Penn, NPC and BAE Systems settlement was a $5.5 million agreement resolving allegations that batteries supplied for Humvee gun turrets had changed after government approval, losing deep-cycle performance without disclosure. The government’s account reaches from the battery manufacturer to the company installing the batteries in military vehicles. For an insider who knows the approved design, the production change or what the customer was told, that is the heart of this case.

The Justice Department announced the settlement on September 16, 2014. The settling companies were MK Battery, East Penn Manufacturing, NPC Robotics and BAE Systems. The allegations concern nonconforming defense products: the performance the government believed it was buying and the performance the companies allegedly knew they were supplying.

The Battery the Government Approved

The Department of Defense wanted dual-purpose batteries with strong starting capacity and good deep-cycling ability to power the turrets atop Humvees. According to the Justice Department’s account of the court documents, East Penn manufactured batteries sold to NPC for government use. Based on the defendants’ representations, the Department of Defense believed the batteries were deep-cycle batteries and contracted with BAE to install them.

The government received samples in 2005 and approved their use. The later production history matters because the government was buying the promised performance in the vehicles it received.

This is where the supplier’s work reaches a government contract. A manufacturer, distributor and contractor can each hold a different part of the product’s history, from production records to purchase orders and delivery documents. We follow those commercial handoffs because the person who understands a changed component may work well before the point at which the finished equipment reaches the government.

The Alleged Change After Approval

The government alleged that East Penn later changed the battery’s design and manufacturing in ways that reduced its deep-cycle performance. It also alleged that the defendants failed to tell the Department of Defense about the change. The approved sample and the later batteries therefore sit on opposite sides of the case’s central comparison.

For a battery engineer or quality employee, that comparison has a practical meaning. We look at what the approved design required, what production changed and which batteries used the changed design or process. Test results matter in relation to that production identity: the result has to describe the product being delivered.

A separate Senate Armed Services Committee investigation into counterfeit electronic parts identified a similar weakness in relying on samples. Its findings described seller-selected samples passing tests while later lots remained unverified. For this battery allegation, the comparison is between the approved design and the production that followed it.

BAE’s Alleged Knowledge and Continued Installation

The government alleged that MK Battery, East Penn, NPC and BAE knew the battery’s performance had diminished. Despite that knowledge, BAE allegedly continued installing the batteries in Humvees supplied to the Department of Defense through 2012 without telling the department about the reduced deep-cycle performance.

We see the absurdity in asking the government to rely on an approval while allegedly withholding the change that undermined it. The government was still buying on the strength of a product representation the defendants allegedly had reason to correct. For someone inside the chain, a dated performance report and the decision about what to tell the customer can explain more than a product label ever will.

When a Supplier’s Assurance Reaches the Government’s Bill

The connection between component performance and government payment also appears in Bradken’s naval steel case. In the criminal case, under its deferred prosecution agreement, Bradken admitted the government’s allegations that falsified tests concealed steel that failed Navy strength and toughness requirements. The Justice Department’s account of the civil settlement describes the billing allegation: Bradken allegedly caused shipbuilders to bill the Navy as though the steel met the requirements.

That is why we follow a component beyond the factory gate. A test record or performance statement can support another business’s assurance about the finished equipment, and that assurance can reach the government’s bill. In the Humvee battery matter, the government’s allegations similarly connect a manufacturer’s product to BAE’s installation work and the defense customer’s understanding of what it would receive.

The Whistleblower Case Behind the Settlement

A qui tam complaint brought the battery’s changed design and performance to the government’s attention, according to the Justice Department. The settlement resolved allegations in that whistleblower case, and the announcement credited the Defense Criminal Investigative Service with investigating. The person who brought the case supplied the missing account of what had changed behind the approved product.

The settlement provided for a whistleblower reward from the recovery. A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. That gives someone with inside knowledge a stake in pursuing government money paid on false representations.

What Evidence Is Needed to Prove Fraud?

For an alleged undisclosed battery change, we work with you to connect the evidence of the approved product, the changed production and what the government was told. We compare specifications and sample approvals with engineering changes, manufacturing records and performance results, then connect the affected production to delivery, acceptance and payment. The point is to show how the difference you saw inside the business reached a government purchase.

Different people can explain different parts of that connection. A quality employee may understand which production a test covered, a purchasing employee may know which supplier’s batteries filled an order, and a customer-facing employee may know how a performance concern was described outside the company. We work through those connections with you, including who knew about the change and what happened to that information as deliveries continued.

You Know What Changed on the Production Line

If you know why a military component no longer matches what the customer approved, speak to one of our Whistleblower Experts about how the battery changed. We connect your technical knowledge to the government purchase, build your strongest defense contractor whistleblower case with you and bring in defense contractor fraud whistleblower lawyers who understand product testing and supply relationships. We remain your partners throughout the case, pursuing recovery of government money through the knowledge you bring from inside the business.