Bollinger in $8.5 million False Claims Act settlement

DECEMBER 9, 2015 – Bollinger Shipyards will pay the United States $8.5 million and release contract claims to settle a False Claims Act action filed against it in the Eastern District of Louisiana, the Department of Justice announced today.

The False Claims Act suit alleges that Bollinger misrepresented the longitudinal strength of patrol boats it delivered to the Coast Guard that resulted in the boats buckling and failing once they were put into service. Bollinger Shipyards is located in Lockport, Louisiana.

"Those who expect to do business with the government must do so fairly and honestly," said Principal Deputy Assistant Attorney General Benjamin Mizer, head of the Justice Department's Civil Division. "We expect the utmost integrity and reliability from the contractors that design and build equipment that is essential to public safety and our national defense."

In 2002, the U.S. Coast Guard contracted to lengthen the Coast Guard's existing fleet of 110-foot patrol boats to 123 feet and to make other modifications. Bollinger was the subcontractor that performed the 123-foot patrol boat design and conversion work. An essential element of the conversion was that the modified boats have sufficient longitudinal strength to meet the performance requirements set forth in the contract.

The United States alleged Bollinger provided the Coast Guard with engineering calculations that falsely represented the longitudinal strength of the boats and was two times greater than their actual longitudinal strength. The United States alleged Bollinger ran the calculations three times and only provided the Coast Guard with the highest and most inaccurate, of the three calculations. The United States further alleged Bollinger also failed to follow the quality control procedures that were mandated by the contract that would have ensured against such engineering miscalculations.

The case was handled jointly by the Civil Division's Commercial Litigation Branch and the U.S. Attorney's Office of the Eastern District of Louisiana.The claims resolved by the settlement are allegations only, and there has been no determination of liability.

Want more? Subscribe now!

News from NASDAQ