The Department of Justice announced that it has intervened in a qui tam whistleblower case charging that the Sikorsky Aircraft Corporation and two of its subsidiaries violated the False Claims Act.

The government’s complaint alleges that Sikorsky Aircraft Corporation approved an illegal cost-plus-a-percentage-of-cost subcontract between Sikorsky Support Services Inc., and Derco Aerospace. A cost-plus-a-percentage-of-cost contract is one where the cost of performance is unknown in advance and compensation is determined based on the cost of performance plus an agreed-to percentage of such costs. Such contracts are prohibited because they give contractors no incentive to control the cost of performance. The complaint further alleges the defendants used this illegal subcontract to overcharge the Navy on parts and materials that were used to maintain Navy aircraft.

The whistleblower is Mary J. Patzer, a former employee of one of the Sikorsky subsidiaries charged with the violations. The case is being litigated jointly by the DOJ Civil Division in Washington DC and the U.S. Attorney’s Office for the Eastern District of Wisconsin. Read the DOJ Press Release.