U.S. Appeals Court Finds That Low Bids By Lockheed Martin Corporation Could Violate The FCA
In a unanimous decision, the U.S. Court of Appeals for the Ninth Circuit determined that knowingly submitting low bids, premised on false estimates, can be a violation of the False Claims Act. This case is based on a qui tam complaint filed in 2005 by a Lockheed Senior Research Operations Engineer, Nyle J. Hooper. Mr. Hooper alleged that Lockheed violated the False Claims Act by (1) knowingly underbidding the contract, (2) including undisclosed freeware in software deliverables that did not convey all intellectual property rights, and (3) failing to perform all required tests or improperly conducting those tests.
A predecessor of Lockheed was awarded a contract, which was later assumed by Lockheed, for the Range Standardization and Automation IIA project, which was administered by the Air Force. Lockheed and two other companies bid for the project; Lockheed’s initial bid was $439.2 million, but its “best and final offer” was $432.7 million.
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