Government Contracts Monitor
Short Take: Start Me Up - Misusing Government Furnished Fuel
March 30, 2015
By: Lindsay Simmons
On March 27th the Department of Justice announced that Lockheed Martin Corporation will pay $2 million for allegedly overbilling the government during its manufacturing of C-130 aircraft for the United States Air Force. Justice Department Press Release.
Lockheed manufactured C-130s for the U.S. Air Force from 2006 to 2013 under contracts where the Government provided Lockheed with up to 22,000 gallons of fuel (characterized as government furnished property or GFP) per aircraft. This GFP fuel was to be used for the “engine runs, fuel operations and test flights necessary to manufacture C-130s”. If and when Lockheed depleted its fuel allotment for a particular aircraft, Lockheed, not the Government, was to absorb the cost of any additional fuel. But the government’s investigation indicated this was not what happened. According to the allegations, Lockheed routinely ran over the allotted 22,000 gallons, but did not reimburse the government for the additional fuel. Apparently Lockheed may also have used some of the allotted GFP fuel “on other unrelated projects, where the government was either not a party, or had not agreed to furnish fuel.”
According to Acting U.S. Attorney John Horn, “Here, in causing the government to pay for fuel that was the company’s financial responsibility, Lockheed failed to live up to the terms of the contracts and caused financial injury to the government. The settlement reflects our resolve to ensure that companies that overbill or overcharge the Government will be identified and held responsible for their actions.”
This settlement ends what are characterized as the long and tireless investigative efforts of Defense Criminal Investigative Service agents and the Air Force Office of Special Investigations.
Lindsay Simmons is responsible for the contents of this Short Take.
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