United Technologies Corporation held liable for over $473 million; OSI recovery efforts contribute to record for case tried under the False Claims Act

  • Published
  • By OSI Public Affairs
  • Air Force Office of Special Investigations
QUANTICO, Va. --  The U.S. District Court for the Southern District of Ohio found United Technologies Corporation liable for over $473 million in damages and penalties arising out of a contract to provide the Air Force with fighter aircraft engines for F-15 and F-16 aircraft between 1985 and 1990, the Justice Department announced in June 2013. United Technologies, which is based in Connecticut, provides a broad range of high-technology products and services to the global aerospace and building systems industries.

"In a recent, long-standing False Claims and Defective Pricing investigation involving United Technologies Corporation, the Department of Justice advised that the estimated $657 million recovery was the largest recovery ever involving the False Claims Act. This recovery happened as a result of decades of work done by OSI and Department of Justice," said Brig. Gen. Kevin Jacobsen, AFOSI commander.

The government alleged that UTC's proposed prices for the engine contract misrepresented how UTC calculated those prices, resulting in the government paying hundreds of millions more than it otherwise would have paid for the engines. Specifically, the government alleged that UTC failed to include in its price proposal historical discounts that it received from suppliers, and instead knowingly used outdated information that excluded such discounts.

The government filed suit against UTC in 1999 under the False Claims Act and the common law, and those claims were tried, without a jury, in 2004. An initial decision by the district court in 2008 found UTC liable under the False Claims Act, but did not award any damages. The district court also dismissed the government's common law claims. That decision was appealed by both the government and UTC. In 2010, the Court of Appeals for the Sixth Circuit affirmed the district court's finding that UTC was liable under the False Claims Act, but reversed and remanded the case to the district court to recalculate the government's damages and to reconsider the government's common law claims.

In the June ruling, the district court awarded the government False Claims Act damages and penalties of $364 million, which is the highest recovery obtained by the government in a case tried under the Act. The court also awarded an additional $109 million in damages on the government's common law claims. With the addition of prejudgment interest on the latter claims, which the court has yet to calculate, the government anticipates that the total judgment against United Technologies could be well in excess of half a billion dollars.

This case was handled by the Civil Division of the Department of Justice. The lawsuit is captioned United States of America v. United Technologies Corp., No. 3:99-cv-093 (S.D. Ohio).