Ultralife: The Cost Data Behind the Army’s Battery Bill

In the Ultralife Army battery pricing settlement, the company agreed to pay $2.7 million to resolve False Claims Act allegations that it knowingly gave the Army false cost and pricing certifications. The government alleged that those disclosures inflated the negotiated price of military batteries supplied under three Army contracts.

The Justice Department announced the civil settlement on June 2, 2011. Ultralife Corporation, based in Newark, New York, was formerly known as Ultralife Batteries Inc. For someone inside pricing, accounting or contract negotiations, the important connection is between the cost information the company held and the information it gave the Army.

The Defense Contract Audit Agency, the Defense Criminal Investigative Service and the U.S. Army Criminal Investigation Command conducted the investigation. The U.S. Attorney’s Office for the Western District of New York and the Commercial Litigation Branch of the Justice Department’s Civil Division handled the case.

What the Army Pricing Allegations Were

Ultralife supplied lithium-manganese dioxide non-rechargeable batteries used in military applications. The government alleged that, on each of the contracts, Ultralife knowingly certified cost and pricing information that was not current, accurate and complete. It said the resulting defective price disclosures caused the Army to pay inflated prices.

The alleged defect was in the information used to negotiate the battery price. That puts the pricing file at the center of the case: what facts were available inside the manufacturer, what contracting personnel were told, and how those disclosures affected the government’s bargain. The government was buying batteries, but the alleged overcharge began with the information behind the price.

We see the absurdity in the government’s account: the certification meant to protect the Army’s price became part of the alleged overcharge. Certified. Taxpayers still got the inflated bill, according to the government’s allegations.

The Facts Behind a Cost Estimate

A Certificate of Current Cost or Pricing Data concerns the facts underlying a contractor’s estimate at the agreed date. It attests that the data submitted or specifically identified are current, accurate and complete. The certificate reaches the factual inputs used to form the estimate.

A forecast involves judgment about future costs, while the certification concerns the facts used to make that judgment. We examine what the company knew when it negotiated the price and how that knowledge compares with the data presented to the government. A dated cost record can connect a fact inside the business to the certification used outside it.

The information can extend beyond the negotiator’s own desk. The certification rule reaches reasonably available information elsewhere in the contractor’s organization, even when the individual negotiator lacks personal knowledge of it. Someone in production or accounting may understand a cost input that a person presenting the proposal never handled. That makes the movement of information inside the company part of the pricing story.

The contract’s payment terms also matter because they connect a representation to the government’s bill. We follow the contract, the proposal, the negotiation record and the payment request together.

Labor Hours and Parts Prices Show the Same Problem

Other Army pricing cases make the disputed information more concrete. Updated production figures and lower available parts prices can change the facts on which the government negotiates. Those are distinct kinds of knowledge that employees may encounter in the ordinary work of making or buying a product.

In the CyTerra mine-detector settlement announced in 2013, the government alleged that the company omitted the latest labor-hour production data during negotiations for three contract modifications. The Justice Department contended that the Army would have negotiated lower prices with that information. Former executives brought the whistleblower case, connecting knowledge inside the business to the data used in negotiations.

The Sikorsky Black Hawk spare-parts settlement announced in 2014 concerned an allegation that the company withheld lower available parts prices during Army pricing negotiations. A lower parts price and a lower labor requirement affect different inputs, but each can undermine the cost picture presented to the buyer. The shared question is what the contractor disclosed before the government agreed to pay.

That is why we read a pricing proposal alongside the business records behind it. Ultralife’s settlement concerned allegedly false certifications of battery cost and pricing data. The other cases illustrate specific information an insider might recognize.

What a Pricing Insider Can Add

The useful evidence of defense contractor fraud connects the government’s price to a representation and the information behind it. For a pricing matter, we examine the proposal and certification alongside the underlying cost records, the negotiation record and the resulting contract payments. Your knowledge can explain what a figure meant, when it became available and how it reached the people preparing the government’s price.

A study published in the International Journal of Management and Humanities in 2022 identifies weaknesses in pricing and contract surveillance among the Defense Department’s contracting vulnerabilities. The connection to a pricing case is practical: oversight depends on understanding the information used to set the price. We work with the person who understands that information, whether their view comes from manufacturing costs, accounting or the negotiation itself.

A False Claims Act Case About the Negotiated Price

A whistleblower case under the False Claims Act can pay 15% to 30% of what the government recovers. We evaluate defense contractor whistleblower claims around the facts you know, the representations made and the payments they affected.

You Know the Costs Behind the Price

If you saw cost data change or disappear between the business records and an Army pricing submission, talk with our whistleblower experts about what you saw. We work with you to build your strongest case, bring in defense contractor fraud whistleblower lawyers who understand pricing disputes, and stay beside you through the pursuit of a recovery.