General Electric 's (NYSE:GE) Aerospace division has agreed to a $9.4 million settlement with the Department of Justice (DOJ) following allegations of substandard manufacturing practices at its Lynn jet engine plant. The settlement was announced on Tuesday by Joshua Levy, Acting US Attorney for Massachusetts.
The allegations, brought forward on behalf of the US Army and Navy, detailed that GE Aerospace had been submitting false payment claims due to their work failing to meet government standards throughout the 2010s. The violations ranged from inconsistent use of functional gauges for inspections, omission of curvic feature inspections, and selling engines with unallowable metallic fragments. These practices potentially put military personnel at risk and occurred between July 24, 2014, and December 31, 2019.
Levy underscored the importance of stringent inspections for high-quality military equipment and affirmed his office's ongoing fight against contractor fraud. He also commended GE for its transparency and cooperation during the investigation.
Special Agent Patrick J. Hegarty of the Defense Criminal Investigative Service (DCIS) echoed these sentiments, emphasizing the commitment to counter contractor fraud in defense procurement. According to Hegarty, adherence to contract specifications is paramount to safeguarding servicemembers' lives.
Despite the severity of the allegations, GE acknowledged selling engines with unallowable metal fragments and agreed to the settlement. The case underscores the critical need for rigorous quality control and compliance in defense manufacturing to ensure top-quality equipment is provided to military personnel.
InvestingPro Insights
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